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ponsored by

A Publication o

The National Venture Capital Association

Preparing or 2009:

More Questions than AnswersWith the selection o Senator Barack Obama as the President-elect, the November 4th election

as set the nation on a new course or both domestic and international policy decisions. And, as

iscussed in NVCAs post-election report, whether Republican or Democrat, the Washington

olicy-making community has at last stopped holding its collective breath and is moving orward

with what it knows best: mapping out scenarios under which policy programs will rise or all.

With speculation rampant about the President-elects priorities, his transition team

nd policy advisors have already begun sounding out stakeholders and we believe

hat, unlike past Presidential transitions, the details o many o his proposals wil legin to crystallize over the next two months. What ollows is a discussion o some

the areas in which NVCA anticipates critical action or our industry.

Economic Stimulus:

At his rst post-election press conerence, President-elect Obama let little doubt that

his initial ocus wil l be on providing the economic stimulus necessary to keep the

ountry rom moving urther into recession. Although Congress may attempt to pass a

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Highlights:What the Data Shows ...................................

Global Accounting Standards

Convergence ................................................

Patent Protection in China ...........................

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4th Quarter 2

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Finding Paths to

Venture SuccessFinding Paths to

Venture SuccessNVCA 2009 Annual MeetingApril 2930, 2009 | Boston, mA

Westin seAport Hotel

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Fourth Quarter 2008 |

timulus package beore year-end, bets are high that Congress will be unable to come to terms with the outgoing Bush Adminis

ion on an acceptable deal. Beyond righting the markets generally, the venture industry should watch or inclusion o incentives

nvestment in small business a campaign promise o the Obama-Biden team that could be included in a stimulus bill.

Tax Policy:The Obama-Biden tax plan (not including the health policy sections) contains three critical components or the venture indu

ry: increasing the capital gains tax to 20% or amilies with income over $250,000; closing the loophole o carried interest

s capital gains; and, perhaps most intriguingly, eliminating capital gains tax or entrepreneurs and investors in smal l business

While Rahm Emanuel, the President-elects designee as White House Chie o Sta, has prominently argued that tax reorm

emain a top priority or the incoming Administration, the manner in which tax reorm is developed and unveiled will have

mendous implications or the shape o the congressional elections in 2010. Despite assertions that changing the taxation o car

nterest is a done deal, we believe that many Members o Congress understand the complexity o this issue both technically

olitically. Increasing capital gains across the board and repealing some o the Bush Administrat ion tax cuts or the top incom

rackets may oer a more palatable early step to address tax reorm. NVCA also views the President-elects statements on inv

ment in innovation and smal l business as positive developments, but will be continuing our outreach to Congress and the new

Administrations transition team to reinorce the understanding o the venture industrys role in building the economy.

Prospects or Comprehensive Health Care Reorm in the New Congress-Impact on

Medical Innovation

Key Congressional leaders and health policy advisors rom the Obama campaign have been working to develop a consensus

round a comprehensive health care package that they plan to introduce early in the new Congress. The package is part o a b

etary and economic plan to help rein in health care costs and broaden access to coverage. The early signs o consensus seem

e centered around a package that would be based on a public-private hybrid model: preserving the current private sector deli

ry system, while developing a strengthened public sector ramework that includes important reorms to the Medicare progra

ocused on access, aordability, and quality. The 111th Congress will likely ocus on the weakened economy beore addressin

omprehensive health care reorm, but incremental reorm is very possible.

The incremental steps wil l likely include early action on a Medicare payment reorm package that includes legislation to reaut

ize the widely popular State Childrens Health Insurance Program (SCHIP), addressing Medicare payment or physicians wh

ace a looming cut o approximately 20% in January 2010, and giving Medicare the power to negotiate drug prices directly w

he pharmaceutical companies.

NVCAs key priorities in this debate are to ensure that any reorm package includes changes in coverage and payment policies

acilitate the wide-spread adoption o new technologies and therapies that improve the quality and reduce the cost o health cNVCA wants to ensure that all patients wi ll have appropriate access to new medicines and treatments that will improve the e

ectiveness and reduce the cost o America medicine.

The ollowing issues are key health legislative issues the will seriously be debated in the New Year that could have a sign

ant impact on venture capital investment in lie sciences:

Comparative Eectiveness Research: Central to the discussions on controlling costs through improved quality are propos

or increased comparative eectiveness research (CER). There is broad consensus emerging in the Senate that CER must be

o the solution to rising health care costs. However, there is not yet consensus on what comparative eectiveness means, o

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how it would be implemented. One key point o discussion on this issue will be whether price and cost are explicitly include

the scope o work o CER. NVCA supports the general concept o CER as long as CER is done or all technologies and the

peutics (both old and new), and that CER research does not include cost-eectiveness determinations in its denition.

Scoring New Technology: Given the importance o budget scoring in health care legislation, any proposal must be able

to demonstrate cost savings or budget neutrality. Although Congressional Budget Oce (CBO) Director Peter Orszag ha

stated that he wants to develop a more collaborative model or scoring health care legislation, the CBO remains unwill

ing to score uture savings rom the application o health care technology that reduces current costs or avoids uture co

CBO wants quantitative data to demonstrate that savings rom technology and other systems reorms are real beore they

score such proposed savings. CBO has stated that it intends to release two volumes outlining the scorable budgetary im

o a wide variety o health care and payment reorm proposals beore the end o the year. This continues to be problemati

or the introduction o new technologies and therapeutics.

Health Care System Efciencies:

Many Congressional leaders and President-elect Obama recognize that there are und

mental faws in the existing health care system that needs to be addressed in order to achieve comprehensive reorm. The

include value-based payment reorm, chronic disease management, prevention and wellness benets, medical adherence m

agement, and health inormation technology, all o which NVCA supports.

NVCA Contributes to HHS White Paper on Investing in Personalized Medicine

and Attended HHS Summit

NVCA completed the Investing in Personalized Health Care Innovation white paper that was incorporated into the Department o

Health and Human Services (HHS) Personalized Health Care Report on Personalized Healthcare. This report is available on

NVCAs website. The report was presented at a private summit on October 6th-7th in Deer Valley, Utah, hosted by HHS Sec

ary Leavitt and Utah Governor John Huntsman. The summit identied opportunities, barriers, and best practices in persona

zed medicine. Dr. Clayton Christensen o Harvard Business School discussed the HHS report and key components that need

e addressed to ensure the advancement o personal ized health care. NVCA members in attendance included Risa Stack (KPC

ue Siegel (Mohr Davidow), Fred Middleton (Sanderling Ventures), and Denish Patel (vSpring Ventures).

The NVCA white paper provided a ramework or the economic assessment o private capital investment opportunities that a

pecically targeted to technology, care delivery services, and inormation management systems that support personalized ap-

roaches to health care. The report concluded that advances in the elds that drive personalized medicine can only continue w

ommitted Federal unding. Demand or treatments and therapies based on these advances wil l grow as people look to under

tand aspects o their personal health and to take greater control over their health. It is our hope that the health care industry

e able to meet this demand by bringing advances in personal ized medicine to the marketplace.

President-elect Obama is an advocate or the advancement o personalized medicine and as President will most l ikely help os

hange in the regulatory processes that have been barriers to personalized medicine.

MIGs CMS Payment Initiatives

Over the last several years, NVCAs Medical Industry Group (MIG) has been working with CMS on developing a roadmap to h

tart-up companies navigate through the CMS coding, coverage, and payment process as part o the MIGs recommendations to

stablish a CMS Reimbursement Critical Path. In August 2008, CMS nally released The Innovators Guide to Navigating CMS.

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NVCA is hopeul that the Guidewill be helpul to start-up companies beginning the CMS process. A copy o the Innovators Gu

an be ound by online at http://www.cms.hhs.gov/CouncilonTechInnov/. NVCA welcomes any eedback on its useulness.

Energy Policy Set to be a Priority

Following a close second to resolving the nations economic crisis, energy policy is expected to be an important priority on th

genda or the Obama Administration and the new Democratic House and Senate. In part, this fows rom the expectation th

mproving the nations energy inrastructure and advancing renewable energy will help create new green-collar jobs. Then-

enator Obama campaigned using themes under the New Energy Economy rubric and outlined a goal to create 5 mil lion n

reen collar jobs. He has also cited the connection between our energy independence and our national security, as well as not

he environmental challenges o climate change.

Many o the goals outlined in the Obama energy platorm are also those o the NVCA. For example, NVCA has supported a

ional Renewable Portolio Standard (RPS), which would require that util ities generate a certain percentage o their energy

enewable sources like solar and wind. NVCA has advocated or a 15% RPS, while the Obama plan calls or a 10% RPS by 20

nd 25% by 2025. In addition, NVCA has lobbied in support o increased uel eciency standards. The Obama Administratio

xpected to increase CAFE standards and make a strong push or getting 1 mil lion plug-in hybrid vehicles that are manuactu

n the US on the road by 2015. We anticipate this and other incentives or renewable energy and energy eciency technologie

will be enacted with the new Congress and Administration.

Although its one o the most publicized energy concerns, climate change will likely be urther down the list o issues to be a

dressed. Legislative activity wi ll certainly take place, but, with the economy altering, implementing a cap and trade system m

e too dicult. Unsure o the impact a cap and trade system will have on companies and the economy, lawmakers may decid

gainst trying to quickly implement sweeping changes in this area. However, because the President-elect has pledged that the

will be leader on the climate change issue, capping carbon emissions and constructing an economy-wide cap and trade system

hat reduces greenhouse gas emissions 80% by 2050 wil l remain a priority.

This year, NVCAs Cleantech Advisory Council will be active on a number o new initiatives such as electricity transmission

nd smart grid, green building and energy eciency. We will also continue our lobbying eorts in support o the creation o

ARPA-E or high-risk energy technologies and a GSE nancing entity or energy projects, as well as pushing or robust und

or basic research or the DOE Oce o Science and other important energy research acilities l ike the national laboratories.

NVCA Receives DOE Award

The Department o Energy has recognized NVCA or the contributions that the venture capital industry has made to advanc

ng renewable energy and energy eciency technologies. The Energy Innovator Award oers appreciation to the VC industry

or developing technologies that strengthen the energy economy, the environment and the national security o the United Sta

NVCA has worked closely with sta o the Department o Energy and we are looking orward to developing collaborative re

ionships with the new appointees that wil l be joining the agency in the new Administration.

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What The Data Shows

Despite the widespread turmoil in the US and global economies, NVCA research statistics through the rst three quarters o

008 refect a U.S. venture capital industry that is very much open or business. From the challenges o non-existent IPO ma

kets, sot acquisition markets, and newly received reports o undraising challenges, there is much or us to watch. But all o t

alanced by reports o record levels o high-quality deal fow and teams coming to the industry.

As these latest statist ics show, there is an ever-increasing number o companies stuck in the later stages awaiting exits. Despite

his, we expect the industry to make an initial investment in well over 1,000 new companies this year. The business environm

verall is dicult or emerging companies to be selling products part icularly to the commercial inormation technology secto

Reduced burn rates and capital eciency become more than mantras with portolio companies, they become mandates. And

nvestment continues.

Investors(LPs)

VC Funds PortfolioCompanies

GPs

A.Commitments* B. MoneyTreeInvestment*

C.Exits*

D.Distributions IRR** Measured by NVCA Statisics

The Venture Capital Cash Cycle

Distributions

PO Draught Continues with Few Signs o Better Times in the Near Term

The chart below shows M&A acquisition and initial public oerings o venture backed companies. Following encouraging

trength in 2004 (Google was a part o that but it was not alone) and lesser strength in 2007, the exit markets have allen fat.

POs have all but stopped in the nine months o 2008. Five companies went public in Q1, none in Q2 and only one in Q3. A

otal o six IPOs does not bode well or the industry and means that some good, mature companies remain in venture und p

olios drawing on the time and nancial support o the venture capitalists.

Too ew companies are going public. But how many should there be? Recent analysis by the NVCA o all companies initially

unded during the 1990s shows that 14% o them went public. In recent years, approximately 1,000 companies are unded or

rst time each year. I 14% o those eventually go public, that suggests a run rate o 140 companies per year going public, or 3

er quarter on average. Recent years have been at levels ar below that.

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Whats Happening in Investment?

Nearly a third o venture deals are going into later stage company. The industry has never seen levels this high. This eect ha

een likened to the high school that has lost its d iploma printing machine. The seniors are unable to graduate and leave. Mea

while, new classes are rising to their senior years joining the prior classes awaiting graduation. This has made it dicult or th

ndustry to turn its attention to the next crop o companies. While 14% o the third quarter deals went to seed and start-up co

anies, this is ar below the levels seen in the growth years o the mid-1990s.

Likewise, the percent o deals going to rst time companies reversed course rom recent gains and ell in third quarter. One quar

does not a trend make, but it does bear out what we are hear ing rom NVCA members and entrepreneurs. With the need or cap

ciency going orward and an uncertain business environment to grow a company, this is a statistic we are watching closely.

Venture Capital Investment 1995 to 2008YTD

Quarter/Year Venture Investment $M % o Deals Seed/Start Up % o Deals Later Stage % o Deals Which Are

Rounds Into a Po

995 7996.34 23.4% 11.3% 4

996 11,265.38 19.5% 11.3% 4

997 14,872.89 16.8% 10.5% 4

998 21,079.27 18.2% 11.3% 3

999 54,048.74 14.8% 9.6% 4

2000 104,945.16 8.8% 8.4% 4

2001 40,577.33 6.1% 12.1% 2

2002 21,998.22 5.7% 15.7% 2

2003 19,772.32 7.1% 20.2% 2

2004 22,451.58 6.8% 26.1% 22005 23,140.72 7.6% 31.7% 3

006 - Q 1 6,447.03 8.1% 31.4% 3

006 - Q 2 7,102.51 8.6% 29.5%

006 - Q 3 6,730.61 11.9% 25.9% 3

006 - Q 4 6,423.35 9.5% 24.0% 3

006 26,703.50 9.6% 27.7% 3

007 - Q 1 7,561.37 9.4% 31.4% 2

007 - Q 2 7,350.51 11.6% 29.8% 3

007 - Q 3 7,824.46 12.1 31.9% 3

007 - Q 4 8,089.05 11.7 30.5% 3007 30,825.39 11.3% 30.9% 3

008 - Q 1 7,831.50 11.6% 30.2% 3

008 - Q 2 7,664.79 10.3% 32.3% 3

008 - Q 3 7131.30 14.0% 32.4% 2

m 2008 22.627.60 11.9% 31.6% 3

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Clean Technology Venture Capital Investment

Not surprising, venture investment in clean technology companies now exceeds 10% o all US investment and continues to g

n the rst nine months o 2008, clean technology investment exceeded the ull year 2007 total dollars. Clean technology dea

end to be larger with the $15.25 million average per deal essentially double the $7.72 million average deal size across al l secto

Year

$M Invested

Clean Tech

# Clean

Tech Deals

Average per

C.T. Deal $M

Clean Tech

Share o Total VC

Investment

998 107 36 2.97 0.5%

999 203 37 5.49 0.4%

000 563 45 12.51 0.5%

001 365 59 6.19 0.9%

002 391 65 6.02 1.8%

003 260 56 4.64 1.3%

004 438 76 5.76 2.0%

005 545 88 6.18 2.4%

006 1,418 135 10.5 5.3%

007 2,642 233 11.34 8.6%

m08 3,095 203 15.25 13.7%ource: PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report, Data: Thomson Reuters

Where to Go or the Latest Statistics

Quarterly statistics are posted on the NVCA website. There are our inormation releases or a typical quarter:

Exit Poll (IPOs and Acquisitions) typically published a day or two ater each quarter end

MoneyTree (Money invested by VC frms in portolio companies) Ocially known as the PricewaterhouseCoopers/Nation

Venture Capital Association MoneyTree Report, with data provided by Thomson Reuters. This is typically released 3-4 weeks ater the

close o the quarter. Shortly ater that, searchable statistics and downloadable spreadsheets can be ound at www.pwcmoneytree.com

Fundraising (Commitments) Typically released around the time o MoneyTree

Perormance (IRRs) Thomson compiles venture capital IRR benchmarks and these are released with at least one quarter lag by the

NVCA and Thomson. Buyout and mezzanine return statistics are released directly by Thomson.

The NVCA 2008 Yearbook, available as PDF le to NVCA members, provides historical data back to 1980. A copy can be

downloaded rom the NVCA website.

NVCA members who subscribe to VentureXpert can access the data anytime, even as it is being accumulated and posted atquarter end. For more inormation about the NVCA research program, contact John Taylor [email protected] . Signi

NVCA member discounts are available or online subscriptions to the VentureXpert database. Contact

[email protected] or more inormation.

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A GPs Primer on Global Accounting Standards Convergence

A recent furry o media coverage has ocused on the possible upcoming convergence o US and international accounting stan

dards. Much o this coverage discusses which accounting system casts which public companies in the most avorable light. W

hat particular matter seems distant rom the US venture capital industry, there are two key aspects o convergence that it app

we need to ocus on:

Determining which system (current US GAAP vs. International vs. neither) is the best system overall or the US business community going

orward. We would expect this dialogue to center on transparency, reliability, relevance, comparability, and ongoing costs in addition to

conversion costs, which might not be insignicant.

Addressing matters which specically aect our unds. One area already identied is the nancial statements provided by GPs to LPs und

international rules should the international rules become the new US rules?

As a rst step towards understanding and engaging in constructive dialogue in both o these areas, the NVCA CFO Task For

has appointed a subgroup to begin gathering acts, analysis, and expert opinion on what all o this means to our industry.

Why Has The Convergence Issue Come to the Surace at This Time?

For years, the United States has been developing generalized accounting principles reerred to as Generally Accepted Account

ng Principles (GAAP). The keeper/arbiter/decider o GAAP is the Financial Accounting Standards Board (FASB). FASB

develops and updates GAAP and the SEC has adopted these accounting rules or public company reporting and other situatio

ver which the SEC has jur isdiction.

In recent years, on a paral lel track, a separate set o rules emerged rom the International Accounting Standards Board (IASB

which was Europe-centric. These rules became known as the International Financia l Reporting Standards (IFRS, pronoun

IFF-ers or EYE-ers).

Over recent years, the large number o multinational corporations complained that they had to endure keeping two sets o books an

his prompted the concept o convergence. In early September 2008, the SEC and the FASB announced steps to pave the way or U

ublic companies to convert rom US GAAP to IFRS. The SEC roadmap provides or a three-year run-up to an SEC go-no go

decision in 2011. 2011 is also the year that major US trading partners, Canada, Japan, Korea and India plan to adopt IFRS. At about

ame time, the FASB and the IASB met to review and re-orient their convergence plan to be consistent with the SECs proposed sc

ule. The updated FASB-IASB memorandum o understanding is at http://www.asb.org/intl/MOU_09-11-08.pd.

Nothing in the SEC proposal or the FASB-IASB memorandum says that the US will conclusively converge to or switch ov

o IFRS. This al l contemplates a well-thought-out and inormed decision in three years. But large processes are being set in m

ion that may be dicult to stop. It is worth pointing out that the SEC roadmap reers to public company reporting; however

hould logically expect alignment o private and public company rules.

What is not clear at this time is what the current global economic turmoil will do to the priority o this project or its timetab

US GAAP vs IFRS Never Generalize

Even viewed rom 30,000 eet, it is dicult to generalize on how the two systems compare. First, while the IASB produces p

anil la IFRS standards, there is no one favor o IFRS in use. Much like the original UNIX kernel, each country/jurisdiction

een able to create its own version o IFRS. But unlike UNIX, sometimes the dierences among the localized IFRS versions

arge. So an apples-to-apples comparison o IFRS-compliant nancials rom dierent jurisdictions can be dicult. Second

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Fourth Quarter 2008 |1

s true that IFRS itsel is a very thin document compared to GAAP, which has grown to roughly a 2-oot stack o written rul

However, to implement IFRS, you need the implementation guide which combines with the original document to create its o

-oot stack. Again, much o the surace comparisons are not useul.

Until this point, US venture capital rms have been using exclusively US GAAP accounting standards. However, in early No

ember, we received a report rom a member rm with international intermediar ies or overseas investment where the local a

ors raised the question o whether those nancial statements need to be IFRS-compliant.

GP-to-LP Reporting

One area already identied as a possible problem area is GP to LP reporting. Virtually all LP agreements (or accompanying d

ments) require GPs to provide GAAP-compliant nancial reports to LPs. Annual audits o these reports are GAAP-based. Un

GAAP, the US venture capital industry provides air-value portolio reports under the special rules o investment company

eporting. Our early analysis o IFRS shows special investment company rules or portolios o publicly-traded companies bu

uch provisions or portolios o private companies.

Most o the SEC and FASB eorts to date have ocused on public company reporting. We are very early on in veriying and crea

wareness o the lack o private portolio provisions. The initial reading is that, under IFRS, the nancial statements or a numbe

the portolio companies would have to be consolidated into the operating nancials o the venture capital und itsel. This wo

reate a muddled report, essentially unusable to the LPs in determining the value o their own portolio holdings. This would m

n end to air value reporting as we have known it. A potential urther complication could arise i DOL ERISA air value rules r

main in place or the plan sponsors while accounting rules abandon the current air value reporting requirements.

How International GPs Now Handle LP Reporting

A logical question arising rom the above paragraph is how venture capital rms operating in IFRS jur isdictions are currently

eporting to LPs, including those subject to DOL ERISA air-value reporting rules. The initia l, and somewhat limited, review

he NVCA CFO Task Force subgroup is that they simply are not doing so. Many international GPs continue to produce nan

tatements in accordance with US GAAP or both their US and international LPs. Those reporting under IFRS are incur ring

dditional eort and expense o also providing a separate US GAAP-type air value schedule.

Recent Events

A ull chronology o events is posted under Valuation Guidelines on the NVCA website www.nvca.org. This document is up

d rom the chronology in Appendix H o the NVCA 2008 Yearbook prepared by Thomson Reuters. Even as the US industr

works toward compliance with the FASBs Statement 157 on air value measurement starting with 2008 nancials, dialogue h

egun on convergence. In March 2008, the International Private Equity Board (IPEV) board reconstituted and re-launched i

PEV was expanded to include ve practitioners rom the United States who are amiliar with the venture industry. The initi

ocus o the group is on convergence o US Private Equity Industry Guidelines Group (PEIGG) and IPEV air value guidel

Details are online at www.privateequityvaluation.com.

Going Forward

With the international and domestic attention on other economic matters, it is not clear how quickly any accounting standard

onvergence activities will move. However, the NVCA CFO Task Force has begun the process o preparing or the uture dia

ogue and the NVCA has several eorts underway to understand the implications. For more inormation, please contact NVC

head o research, John Taylor,[email protected] .

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Beyond the Due Diligence:Patent Protection in China

y Michael Vella, Richard Hung and David Yang, o Morrison & Foerster LLP

As the Chinese economy continues to grow, investors are increasingly considering investments in or somehow related to Chi

Like any other high-tech investment, China-related investments require thorough due diligence into the companys technolo

o understand the patent landscape. But in China due diligence only takes you so ar. Although China has made signicant p

ess in patent protection over the last decade, oreign companies continue to view the protection and enorcement o Chinese

nt rights as inconsistent and unpredictable. This article provides an overview o Chinas patent laws and patent litigation syst

o that investors will have an idea o the risks that remain ater the due diligence is done.

Overview o the Chinese Patent Law

Chinas Patent Law was rst promulgated in 1984. It has been amended twice (in 1992 and 2000) in an eort to brin

he Patent Law in line with the requirements o the Paris Convention or the Protection o Industrial Property and the WTO

Agreement on Trade Related Aspects o Intellectual Property Rights (TRIPS). Currently, a third amendment o the Patent L

s under consideration to bring the law urther in line with international standards. As a result o these amendments, the Chin

Patent Law largely resembles, and will increasingly resemble, U.S. patent law.

Under the Chinese Patent Law, patent protection is available in three categories - invention patents, design patents and utility

model patents. Invention patents last or 20 years rom the date o application, while design patents and utility model patents h

shorter term o 10 years rom the date o application.

Patent applications by oreign legal persons without a habitual residence or a place o business in China1 must be made throug

uthorized patent agent and led with the State Intellectual Property Oce (SIPO) in Beijing,2 while SIPO oces at the pro

ial and municipal levels are responsible or the administrat ive enorcement o patents.

There are, to be sure, signicant dierences between U.S. and Chinese patent law. For example, China, along with most o

he other jurisdictions in the world, ollows the rst-to-le approach. This diers rom the rst-to-invent approach in th

United States. Under the rst-to-le approach, whoever les a patent application rst has priority to obtain a patent or the

nvention regardless o whether that person was the rst to invent it. It should, however, be noted that a patent application ma

till be invalidated by evidence o published prior art.

n short, although dierences remain, most patent savvy investors will nd the Chinese Patent Law to be more amiliar than

nringement Proceedings in China

While the Chinese Patent Law largely resembles U.S. patent law, the Chinese patent litigation system is a world unto itsel. To

help investors assess the risks o patent litigation in China, we provide the ollowing summary o some o the distinguishing c

cteristics o Chinese patent litigation.

Representative ofces in China are generally not considered to be habitual residences or places o business.

Application orms may be submitted to SIPO located in Beijing or its authorized local agencies.

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The rst thing to know about Chinese patent litigation is that it is ast. In the United States, the average patent case takes approx

mately two years. In certain U.S. jurisdictions called Rocket Dockets, the courts have reduced the case schedule to as little as n

months. In China, however, a patent trial on the merits can take place within six months o the ling o the complaint.

econd, there is no discovery in Chinese litigation no document requests, no interrogatories, and no depositions. Thus, the

s no way to compel the opposing party to produce evidence relevant to the case. It is possible to apply to the court to collect

vidence rom the other side. But that procedure is let to the discretion o the court, which oten is reluctant to apply it.

Third, as in the U.S., the burden o proo is on the plainti. There are situations where that burden can be shited to the dee

dant. But or the most part, a plainti seeking to enorce its patent rights must be prepared to shoulder the burden o proo ba

n its own independently developed evidence. Given the plaintis burden o proo, the lack o discovery, and the speed o lit

ion, it is imperative or patent owners to prepare thoroughly beore l ing suit.

Fourth, there is no opportunity to chal lenge the validity o a patent as a deense in a patent inr ingement lawsuit. To challeng

he validity o a patent, a re-examination request must be led with the Patent Re-examination Board (PRB) o SIPO, whic

s tasked with the responsibility o determining patent validity. Parties who are dissatised with the PRBs decision may appe

o the Peoples Court within three months o receipt o PRBs decision. A stay o the litigation pending re-examination o th

sserted patent may be granted by the courts. However, the courts have the discretion not to grant a stay and, in practice, the

ten decline to stay the case.

Continued on p.

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http://www.mofo.com/http://www.mofo.com/http://www.mofo.com/

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Fith, the evidentiary ormalities in China can be dicult or oreign parties who are not prepared. All documents created

utside o China must undergo certain ormalities to be admitted as evidence. Generally, the documents must be notarized by

notary authority in the country where the document was created and then authenticated by the Chinese embassy or consulate

hat country. Additional ormalities may be required or authentication o witness statements. Thus, inexperienced trial couns

an easily nd their evidence barred rom consideration.

ixth, the Chinese patent trial is a unique experience that bears little resemblance to U.S. patent trials. There is no jury. Instead,

ases are decided by a court composed o a panel o three judges. The court generally conducts a series o hearings. For example

ourt may hold an evidence exchange hearing. At this hearing, the parties exchange the evidence on which they will rely at th

rial. This procedure is supposed to give the other side an opportunity to review the evidence so as to prevent unair surprise at t

O course, because there is no discovery, this wil l be the rst time that the parties get to see the other sides evidence. I, as can h

en, the trial quickly ollows the evidence exchange hearing, there may be insucient time to respond to the evidence.

The trial itsel is organized into several ormal stages, which do not allow or the detailed exploration o actual issues to whic

most U.S. companies are accustomed. Instead, the ocus o the trial is on explaining and disputing the written submissions an

documentary evidence. While cross-examination o witnesses is permitted, it is subject to signicant time constraints. In act

iven the tight time constraints o trial, and the perception that party witnesses are biased, witness testimony plays a ar less im

ortant role than it does in U.S. patent litigation. It is not surprising, then, that the decisions in Chinese courts also tend to o

n the written presentation o evidence, especially the complaint and evidentiary statements. This dierent ocus once again

highl ights the importance o early and comprehensive preparation o evidence.

Finally, there remains a great deal o uncertainty in the outcome o patent cases. Unlike the United States, the Chinese ju-

diciary is not wholly independent o the civil authorities. As a result, many litigants worry that the authorities will infuen

he outcome o a patent case. This is less o a concern or litigants in courts located in large metropolitan areas such as Beij

r Shanghai. But in jurisdictions where the Chinese companys operations are important to the local economy, these politi

oncerns are heightened.

Conclusion

n assessing tech investments related to China, bear in mind that any litigation is inherently unpredictable. Chinese patent liti

ion is perhaps more so because it is stil l in its inancy. To address this situation, experienced U.S. patent litigators are increas-

ngly being asked to play a role in overseeing the substance o the case and shaping the overall litigation strategy. O course, t

nly possible i the U.S. lawyers have the Chinese language skil ls sucient to communicate with the local counsel and ecie

nalyze the important case documents. While U.S. counsel cannot appear in the Chinese courts or advise on the Chinese pat

aw, their participation on the litigation team can improve the presentation o the evidence while minimizing misunderstandi

etween U.S. clients and Chinese counsel.

Michael Vella, Richard Hung and David Yang work respectively in the Shanghai, San Francisco and Los Angeles oces o Morrison & Foerster LLP where the

manage China-related disputes in both China and the U.S.. They can be reached at: [email protected]; [email protected]; and [email protected].

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Support VenturePAC by December 15

As another election cycle comes to a close, NVCA would like to thank our members or their support o our political action

ommittee. As we have done or many years, VenturePAC contributed to key races in both the Senate and the House o Rep-

esentatives. Our PAC contributions were given to incumbents and challengers who support policies that avor our innovation

genda and tax policies that recognize the value o entrepreneurship and risk taking.

During the 2007-2008 cycle, NVCA raised and contributed over $1 million. Despite the relative small size o the venture ind

ry, our PAC is one o the more well-unded trade association PACs in Washington. Our long history o supporting candidate

rom both political parties has served us well over the years and we expect that it will serve us well in 2009. We have broad an

deep relationships with a d iverse membership o Representatives and Senators, including groups like the New Democrat Coa

ion and Blue Dog Coalition that wil l be major players in the new Congress.

Our Annual VenturePAC undraising cycle is underway and wil l continue through December 15th. NVCA encourages our

members to contribute to this important advocacy tool and make the voice o your proession heard to lawmakers who are m

ng critical policy decisions that impact our industry. Contribution orms were mailed out to members in September. I you n

dditional orms or have questions, please contact Molly Myers at [email protected].

A Superior Property andCasualty Insurance Solution

or NVCA MembersThe member brokers o TechAssure just completed nego

tions with OneBeacon Insurance Company (OBI), an A

Best A, XIV rated insurer, to add a Property and Casua

Insurance Program to VentureInsure, TechAssures suite

insurance products available only to NVCA members. T

coverages provided include Property and General Liabil

ity in a package policy, Commercial Auto; Umbrella; an

Workers Compensation. Foreign Liabi lity coverage can

also be provided.

Property and Casualty Insurance is requently an overlooked

area o protection or many Venture Capital rms primarily

cause the policies are a mandated purchase by state law, part

ship agreements, lease agreements and nancial institutions.

Historically, most insurers have lumped VC rms into a

nancial institution classication under a Business Own

Policy (BOP). While they provided coverage or property,

NVCA Strategic CommunicationsGroup Gathers in San Francisco

More than 70 NVCA members attended the Fall Strategic

Communications Group meeting which was held on Octo-

ber 16 in San Francisco. The day was spent in sessions which

ocused on best practices in marketing and communications

at venture capital rms including securing top speaking

engagements, re-naming a rm or a company, and expo-

nentially improving PowerPoint presentations. The StratCom

Group also received results rom the 2009 Marketing and

Communications Budget survey and heard rom New York

Times Venture Capital Beat reporter, Claire Miller.

The NVCA StratCom Group is open to all members who are

responsible or the marketing, communications and/or in-

vestor relations at their respective rms. Presentations rom

the Fall meeting are also available. For more inormation,

please contact Emily Mendell at [email protected].

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ommercial liability exposures, workers compensation, etc. the end product was ull o narrowing policy exclusions. In addit

many insurers who oered BOPs or venture capital rms recently withdrew rom the market and are non-renewing existing

olicies. Needless to say, this added urther complication to an already dicult area o insurance.

The SolutionOBI has agreed to straightorward policy wording. While it has never been the intent o a VC Commercial General Liability

olicy to provide coverage or claims at the portolio company level, the OBI policy addresses this with signicantly improve

olicy language. In addition, the policy does not contain a Proessional Liability exclusion. This has never been done beore a

llows the VC to have more extensive personal injury and advertising injury coverage under the Commercial General Liabilit

olicy. Note that this is not meant to be a replacement or Proessional/Errors and Omissions coverage (as ound under a Vent

Capital or Private Equity Proessional policy) as the denition o property damage in OBIs General Liability orm does no

over nancial damage without accompanying actual physical damage. This does, however, ll a major coverage gap between

General Liability and Proessional Liability coverages namely that the ormer historically excludes proessional l iability and

atter excludes bodily injury, property damage, personal injury and advertising injury.

What About Cost?

Recent renewals in the OBI program have saved NVCA

member rms about 25% on their annual renewal premium

In current economic times, we believe better coverage or less cost is

unparalleled solution or NVCA members.

This program can only be accessed via a TechAssure bro-

ker. NVCA members can visit the www.ventureinsure.co

website to learn more and to contact a member o TechAsswhich has a local representative ready to serve you.

Pamela W. Mason, AAI, is TechAssures NVCA Committee Chairperson and

President, Management Liability Practice Leader o Mason & Mason Tech

ogy Insurance Services, Inc. Ms. Mason specializes in risk assessment and

coverage solutions in the areas o private equity and venture capital liabilit

corporate securities liability, directors and ocers liability, portolio liabilit

programs, duciary liability and employment practices liability. Ms. Maso

be reached at [email protected] or781-447-5531 X132.

Member-WideCommunications Call

On Friday, November 14th, NVCA held its second member-

wide communications where NVCA sta discussed the

post-election environment or the venture capital indus-

try, the impact o the nancial crisis, and other important

member updates. Specically, our agenda comprised the

ollowing topics:

Public Policy Update

What to Expect rom New Administration

and Congress

Top public policy priorities or 2009

Communications During Financial Crisis

Entrepreneurship Week 2008

Membership Services Update

NVCA PAC Update

A playback o this call will be available through Decem-

ber 31st. You can access this call by using the ollowing

inormation:

Call in #: (888) 843-8996 or(630) 652-3044 or inter-

national calls Passcode: 23206116

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NVCA Webcast: Monitoring Portfolio Performance: Corrective Plans For Action

Friday, December 12, 2008

12:00 1:00 pm ET, 9:00 10:00 am PT

As venture capital frms and their portolio companies navigate

through this economic downtown, it is increasingly important

to monitor the perormance or each company in your portolio.

Making quick and eective strategic shits may help save the

best companies in your portolio and increase your unds ROI.

Please join us or this dynamic discussion, moderated by Stephen

Ferruolo o Goodwin Procter LLP, which will cover:

Examining previous assumptions and reorecasting key busi-

ness metrics (available reserves or additional fnancings, f-

nancial orecasting, growth expectations, burn rates, strength

o strategic partnership, customer acquisition, and more)

Identiying legal issues that venture capitalists should be aware

o when dealing with troubled portolio companies

Recognizing misalignments o interests and implementing

corrective actions

Our Panel:

Stephen Ferruolo, Partner, Goodwin Procter LLP (moderator)

Venky Ganesan, Partner, Globespan Capital Partners

Kip Sheeline, Partner, Levensohn Venture Partners

Thanks to the generosity of our sponsor, NVCA mem-

bers can register for this webcast at NO charge. Non-

members can register for $275.

To Register: www.nvca.org/events.html

Thanks to our Sponsor:

Back By Popular Demand: VCs @ CES

Fourth Annual Networking Reception For Venture

Capitalists Attending The International CES

Thursday, January 8, 2009 | 5:00 7:00 p.m.

Table 10 Restaurant, At the Shoppes in the Pallazzo

Las Vegas, Nevada

Please join us or an opportunity to connect with the many

venture capital proessionals that will be attending the 2009

International CES. This networking reception consistently draws

a strong attendance o 150+ venture capitalists all interested in

the consumer electronics sector. Table 10 oers delicious ood

and a un atmosphere where venture capitalists can relax and

discuss the trends and companies they are seeing at the CES

show and in their portolios.

I you havent RSVPd yet or this NVCA Members Only recep-

tion, please email [email protected] with the name o

person who plans to attend, their company and their email.

NVCA has arranged or a complimentary registration to CES

or NVCA Members. To take advantage o this oer, please ol-

low the ollowing steps:

Go to1. www.CESweb.org/pressReg

Scroll down and select create your 2009 Press Analyst2.

Registration

Complete regstration orm3.

For Badge Category, select Financial Analyst/Equity Analyst4.

Where it asks or an article, type NVCA in the Article1 space5.

Follow remaining directions6.

VCs @ CES Reception Is Generously Sponsored By:

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Solicitations Sought or DOEs Entrepreneurn Residence Program

DOE announced a competitive solicitation or ve VCs to participate in the expansion o DOEs Entrepreneur in Residence

EIR) program to accelerate cleantech deployment and commercialization rom DOEs National Laboratories. The EIR progolicitation will place ve more VC entrepreneurs in ve DOEs National Laboratories and will provide up to $50,000 or eac

ntrepreneur to help deray salary and other expenses. This announcement combines with the February 2008 announcement

total o eight DOE National Laboratories and venture capital rms to participate in the EIR program.

The fve new National Laboratories to participate in the program include:

Argonne National Laboratory in Argonne, IL

Brookhaven National Laboratory in Upton, NY

Lawrence Berkeley National Laboratory in Berkeley, CA

Lawrence Livermore National Laboratory in Livermore, CA

Pacic Northwest National Laboratory in Richland, WA

Each rm will match DOE unding and may contribute additional unds to support its entrepreneurs work. While at the labora

he entrepreneurs will also recommend policy and business practice modications to the National Laboratories to urther rene

cientic approaches to moving technologies into the private sector.

ee DOEs Web site (www.energy.gov) to nd more inormation about the EIR program and or the unding opportun

nnouncement visit Grants.gov. Applications are due January 6, 2009.

NVCA Becomes a Microsot BizSpark Partner

On November 6th, NVCA announced that it is partnering with Microsot to oer BizSpark to NVCA members. BizSpark will

ide NVCA Members early stage portolio companies all the sotware they need, plus technical support and market visibility, o

hree years, or USD $100. No strings attached.

Through BizSpark, members o the NVCA can oer startups ast, easy access to current, ull-eatured Microsot sotware dev

pment tools and server technologies, as well as production licenses at no cost. To be eligible or the Microsot BizSpark Pro-

ram, startups must be:actively engaged in the development o a sotware-based product or service that is a core piece o their business model,

privately held,

in business less than three years, and

have less than USD $1M in revenue.

Enrollment in the program is ree. Startups can keep all the dev and test sotware they have downloaded over the three years

he program. Microsot wil l assess a USD$100 program oering ee at program exit.

Members o the NVCA are pre-approved as a BizSpark Network Partner. But, rms must enroll to get star ted.

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tep 1: Go to http://www.microsot.com/BizSpark/Register.aspx?AccountType=NetworkPartner&SecurityCode=Q1Gd77jm

o enroll as a BizSpark Network Partner

tep 2: Accept the Network Partner agreement, ll in basic company, primary and secondary contact inormation and you ar

et, pre-approved and ready to invite eligible Startups!

you have any questions, please contact Don Dodge at [email protected]

New Private Market Platorm to Bridge IPO Crisis

Access quality, long-term capital or late stage nancings

Build direct relationships with top institutional investors

Optimize the value o your company pre- and post-IPO

nsideVenture is a new industry sponsored enterprise support-

d by venture capital and buy side leaders or late-stage and

re-IPO companies. Only top long-term inst itutional und

mangers are approved or InsideVenture membership, which

llows them condential access to ventures leading company

nvestment opportunities. Nominate your company today to par-

icipate in InsideVentures March 24-26, 2009 Debut Technol-

gy and Healthcare Conerences in Santa Barbara, CA. To ap-

ly or participation in InsideVenture, companies must submit

n application onlineby December 30, 2008.

nsideVenture connects best o breed, late-stage companies

with the top long-term institutional and strategic investors

who can sustain value and growth through dicult market cy-

les. Current ounding members and strategic partners include:

NEA, Venrock, Domain, DCM, Aisl ing, Clarus, Frazier, Ver-

ant, T. Rowe Price, Wasatch Advisors, Intralinks, and Silicon

Valley Bank. Our buy side members are interested in seeing

op venture-backed companies raising $20-$200M rounds

nd/or contemplating potential IPO within 6-18 months.

Only ventures top companies will be selected to participate in

nsideVenture. Selected companies receive a secure data plat-

orm powered by IntraLinks or condentially sharing inorma-

ion with prospective investors. Selected companies can also

reate virtual roadshows, participate in live roadshows and may

e invited to present at InsideVenture Investor Conerences.

NVCA Participates in GlobalEntrepreneurship Week 2008

With the goal to inspire innovation, imagination and creativ-

ity, Global Entrepreneurship Week brought together hun-

dreds o associations to encourage youth entrepreneurship.

During the week o November 17-21, NVCA blanketed

Capitol Hill with inormation about venture capital and

entrepreneurship. As part o this eort, every member o

Congress received a customized packet which included: 1)

data on the contribution o venture capital to their home

state; 2) NVCAs public policy positions on taxes, clean

technology and lie sciences; and 3) a USB drive containing

the NVCA video VentuReality.

Thousands o activities were planned in more than 75

countries around the world. NVCA was proud to do its

part, advocating or policies that are avorable to innova-tion and entrepreneurship in the United States.

State inormation packets are available to members.

Please contact Emily Mendell ([email protected])

with your request.

To view a complete list o participating countries and orga-

nizations in Global Entrepreneurship Week, visit

www.unleashingideas.org.

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nsideVenture is not a broker dealer and does not change transaction ees on unds raised. All venture rms are ree to nomin

heir companies. There is a $300 application processing ee. Selected companies may participate in InsideVentures platorm an

onerences or an aordable fat ee. Additional nancial marketing services are oered a la carte, as requested.

or more inormation, please contact: Benjamin Levy, Vice President, 650-926-0661, [email protected].

Angel Groups: Your Early Stage Investment Colleagues

y Ian Patrick Sobieski, Band o Angels and ACA Board Vice Chair

Many o you will know something about angels because most deals that venture capitalists und have received at least so

money rom individual investors. Frequently these investments are considered the riends and amily round, despite th

act that they oten include neither riends nor amily but rather simply individuals known to the entrepreneur and willi

o bet on making a monetary return by investing in him or her.

These angels have been a large source o investment dollars or sta rtups, and yet they come rom a source which has b

historically diuse and unbranded and thereore dicul

VCs to work with in a proess ional and consi stent way. B

about 15 years ago, angel investors began to become mo

organized.

Hundreds o Organized Angel Groups

throughout North AmericaCurrently the Angel Capital Association (ACA), a trade a

sociation or angel organizations, has 165 member organi

angel groups and another 22 aliated organizations and a

sociations. ACA member angel groups represent about 7,

accredited investors who und about 700 companies a yea

and have an ongoing portolio o more than 5,000 compa

across the US and Canada.

ACA has a permanent executive director, national oce,

board o directors, and sta. Serving angel groups in the U

and Canada, ACAs goals are to share best practices and ed

tion and build relationships and collaborations between an

groups. ACA and NVCA have agreed to cooperate in a nu

ber o ways including working together on public policy is

o mutual benet such as capital gains tax treatment. And,

have established mutual liaisons to each others boards, I am

the ACA Liaison to NVCA and David Spreng o Crescend

Ventures is the NVCA Liaison to ACA.

NVCA Webcasts Now Freeor Members

Access to All Past Webcasts Also Free to Members

NVCA has made access to its webcasts FREE or all mem-

bers. Although participation or our webcasts has been

quite strong, NVCAs Board o Directors elt that the inor-

mation shared in these programs should be widely available

to all members as the inormation provided is valuable to

every venture capitalist.

This pricing model is made possible by our sponsors.

Recognizing that many o our members work with a wide

variety o well-respected law rms (and other service or-

ganizations), we encourage members to make these rms

aware o NVCAs webcasts and the act that we welcome

the opportunity to partner with new rms on such pro-

grams. I interested, they should contact Jeanne Metzger at

[email protected] .

Inormation about all NVCA webcasts can be ound on the

NVCA website in the events section.

Continued on p.

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Angel Group Organization and Focus

n contrast to VC rms with serious sounding names, angel groups have historically adopted somewhat sel-eacing

names Band o Angels , Active Angel Investor Network, CommonAngels. These names belie how seriously angel gro

trive or a level o proessionalism and sophistication that would compare avorably to that o a small venture und. Wh

rganized angel groups do not have the inrastructural depth o Sequoia Capital or Crescendo Ventures, they do have

tructures and processes, diligence mechanisms, and negotiating power, and oten small paid stas, that make them beha

imilarly to smaller proessional VC unds.

The mathematician Alan Turing proposed evaluating the success o an articial intelligence machine by placing the mechanis

nside a box. I a human user interacted with it in such a way that the user could not discern whether the occupant o the box

nother human or a machine, the machine was deemed to be intelligent in the same way humans are. Similarly angel grou

have been developing structures and processes, with the help o ACA, so that i one looks only at their inputs and outputs mo

nd more groups are, rom a strict examination o their inputs and outputs, indistinguishable rom small VC unds.

Angel groups bring to bear a substantia l level o dil igence that draws rom the business experience o the members. Most angroups negotiate standard equity term sheets with the same protective provisions a VC would propose such as liquidation pre

nce, drag along rights, and anti-dilution terms. Most startups receiving investment rom angel groups have a competent ange

oin the startups board o directors.

Whereas most readers o this article will naturally know how to interact with small venture unds because the business model o

ied interest and management ees is comparable to what a larger VC und has, there is a lack o knowledge on the part o many

bout what angel groups actual ly are, how they work, what makes them tick, and how best to work with them.

VCs and Angel Groups Working Together to Enhance Deal Flow and Returns

This is the rst in a series o ar ticles to help VCs learn about angel groups as their colleagues in the same nancial ood chain

ome VCs are angels themselves; in a recent ACA survey, more than 66 percent o the responding groups did a deal with a VC

rm in 2007. The growing trend o angel groups developing standard investment processes and terms is leading to increased

yndication with other angel groups and early stage VCs. However, many VCs stil l may not realize how close organized ange

roups are to the VC line o business and way o thinking and

perating.

Organized angel groups are an emerging part o the entre-

reneurial ood chain and have an appropriate place alongside

mall VCs. We are establishing a brand and creating a legacy

nd reputation as the kind o proessional investors that entre-

reneurs and venture capitalists can and want to work with.

an Sobieski may be reached at [email protected]. A list o ACA

members by region is available at www.angelcapitalassociation.org.

We welcome NVCA members to join us at our annual conerence in Atlanta,

pri l 15-17, 2009.

BGI Growth PartnersSan Francisco, CA

BioGenerator

St. Louis, MO

www.biogenerator.org

Frontera Group

Sherman Oaks, CA

www.onteracapita.com

Hartord Ventures

Farmington, CT

www.thehartord.com

Launch Capital, LLC

Boston, MA; Palo Alto, CA

and New Haven, CT

www.launch-capital.com

Midpoint Food &

AG Fund, LPCarmel, IN

www.midpointvc.com

Welcome New NVCA Members!

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Thought Leaders o Wall Street Video Series

ntraLinks, the leading provider o online workspaces, in collaboration with The Deal, has launched the Thought Leaders o W

Street video series this all. It is a collection o in-depth video interviews eaturing senior-level nancial services executives.

New video interviews have recently been added to the series. Thought leaders rom JP Morgan, Thomas H. Lee and others s

heir insights on current market conditions. You can view the videos at: http://www.intralinks.com/thoughtleaders/

We wil l be adding new interviews regularly, so be sure to check back oten to view more insightul commentary.

Current speakers and topics covered include:

Maria Boyazny, Siguler Gus Managing Director and Portolio Manager, discusses the range o opportunities or investors in the in-

creasingly expanding distressed market

Michael Boublik, Co-head o M&A, Investment Banking, Morgan Stanley, looks at deals in the healthcare industry.

Doug Braunstein ,JP Morgans Head o Investment Banking, addresses an audience on Bear Stearns, WaMu, and what it takes to get

deals done in the current economic environment

Robert DeSutter, Co-head o Healthcare Equity, Investment Banking, Piper Jaray, talks about private equity

Charles Ditko, , Co-head o Global Healthcare, Banc o America Securities, provides insights on healthcare dealmaking

John Eydenberg , Head o Leveraged Finance, Deutsche Bank Securities, gives his thoughts on the eects o the current credit crisis

Ken Hitchner, Head o Healthcare Investment Banking, Goldman Sachs, speaks about Healthcare M&A

Alan Jones, Global Private Equity Co-head, Morgan Stanley, talks about private equity nancing

Gary Parr, Chairman, Lazard, oers his viewpoint on sovereign wealth unds

Adam Sokolo, Managing Director & Head, Financial Sponsors Group,Jeeries & Company, discusses middle market deals

Scott Sperling, Co-President oThomas H. Lee Partners, provides an overview o his rms approach to market opportunities in the

current economic environment

Gary Talarico, Sun Capital Partners Managing Director, gives his insights into balancing the opportunities and risks o the distressed mar

To view these videos go to http://www.intralinks.com/thoughtleaders/

ntraLinks is an NVCA partner whose technology can be used in a variety o ways to streamline your critical business processes and

aeguard your sensitive inormation. IntraLinks On-Demand Workspaces enable the secure exchange o electronic inormation

Limited Partner Reporting Mergers & Acquisitions

Fundraising Initial Public Oerings

Portolio Company Reporting And more

ntraLinks acilitates the reporting and undraising processes by enabling rms to di stribute documents such as quarterly

eports, capital calls and private placement memorandums online, reducing overhead and speeding inormation fow. For e

pportunities, IntraLinks provides the leading virtual dataroom solution on the market, helping to streamline processes su

mergers, acquisitions and in itial public oerings.

NVCA members receive a 10% discount per year on IntraLinks On-Demand Workspaces as long as they remain NVCA members.*

To take advantage o this special oer or request a demonstration o IntraLinks services, please send an email to: [email protected]

* Available with new serv ice contracts only; may not be combined with other promotional discounts or arrangements.

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Take Advantage o theBenefts and Costs Savings

Oered ThroughNVCA Partners

In recent years, NVCA has ormed special partnerships

with several organizations that provide services important

to venture capital rms. Following is a brie description o

NVCAs Partners and the discounts and services that they

oer. We encourage all members to contact these orga-

nizations directly to learn more about their oerings and

how they can assist your rm.

Cleantech Network NEW PARTNER

Knowledgeable investors and new entrants into the clean-

tech space recognize the Cleantech Network is a highly

reliable, trusted and signicant source o quality deal-fow

and industry inormation or its Member Investors and

Service Providers. NVCA members receive a one-time

20% discount o membership when they join the Clean-

tech Network and a 10% discount in subsequent years. For

more inormation, please visit http://cleantech.com .

ConerencePlus Conerencing Partner

For nearly two decades, ConerencePlus has provided ull-

service customer-ocused conerencing services to com-

panies around the globe. They support all conerencing

media and know how to help clients use conerencing to

cost-eectively enhance productivity. ConerencePlus o-

ers NVCA members signicant discounts on their audio

(.0395 cents per minute) and web conerencing services.

For more inormation, contact Michael Edenbaum at

512-535-4596 [email protected].

Entrepreneurs Foundation

Venture Philanthropy Partner

Entrepreneurs Foundation (EF) engages high growth com-

panies in corporate citizenship and philanthropic eorts so

that new and leveraged resources are generated or commu-

nity benet. EF works with emerging companies to develop

a culture o community support and outreach. Recognizing

the time and resource constraints typical o young compa-

nies, EF assists companies with the implementation o com-

munity involvement activities, matching their corporate

culture and philanthropic interests with the many opportu-

nities in the local community. Entrepreneurs Foundations

are located in the ollowing communities:

Atlanta, GA www.the-efse.org

Boston, MA www.efofne.org

Honolulu, HI www.efhawaii.org

Silicon Valley/San Francisco Bay Area

www.efbayarea.org

Tel Aviv, Israel www.tmura.org

Austin, TX www.givetoaustin.org

Dallas, TX www.efnt.org

Portland, OR www.eforegon.org

Boulder, CO www.efcolorado.org

Sacramento, CA www.efcr.org

Fidelity Charitable Services

Philanthropy Partner

Fidelity Charitable Services is a leader in charitable planning

and giving solutions. They deliver a broad range o solutions

and services, including: dedicated customer service with

charitable giving expertise; multiple solutions or donors with

substantial assets, complex nancial needs, and complicated

tax issues; and industry-leading inormation on giving op-

tions and strategies, with online tools and resources.

Fidelity Charitable Services oers the ollowing benets

to NVCA Members:

Reduced Administrative Fee o 20bps or NVCA Members

Expertise in accepting complex gits such as limited partner-

ship shares, restricted stock and privately held securities

Continued on p.

8/14/2019 NVCA Today (4thQ2008)

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Dedicated Relationship Management

Always accessible online account management ability

14 investment pool options, including index pools at a low

cost o 7bpsNo ongoing tax ling required as all contributions constitute

a completed git to charity

For more inormation, visit

www.fdelitycharitableservices.com or call 800-280-6357.

Intralinks Secure Electronic

Communications Partner

IntraLinks is an NVCA partner whose technology can be

used in a variety o ways to streamline your critical busi-

ness processes and saeguard your sensitive inormation.

IntraLinks On-Demand Workspaces enable the secure

exchange o electronic inormation or Limited Partner

Reporting, Fundraising, Portolio Company Report-

ing, Mergers & Acquisitions, Initial Public Oerings, and

more. NVCA members are eligible or a 10% discount o

subscription rates. For more inormation visit

www.Intralinks.com or contact Tara Roesch at

[email protected].

TechAssure Insurance Partner

TechAssure is a unique international association o pri-

vately held, entrepreneurial insurance and risk consultants

specializing in mitigating the risks aced by emerging

growth companies and the venture capital rms that back

them. TechAssure and NVCA have teamed up to provide

NVCA members VentureInsure, a suite o comprehensive

insurance coverages and risk management services de-

signed to protect venture capitalists and their investments.

VentureInsure has proven to be the most comprehensive

liability insurance package available while providing

signicant cost savings to the venture rms and portolio

companies who have utilized the program thus ar. For

more inormation, contact John Love at

[email protected] orwww.techassure.com.

Thomson Reuters Industry Data Partner

Thomson Reuters oers an unparal leled range o private

equity related products rom directories to conerences,

journals, newsletters, research reports, and Thomson One

Banker (ormerly known as VentureXpert). *Contributing

NVCA member rms are entitled to a 20% discount o

Thomson One Banker annual subscriptions. NVCA Mem-

bers with less than $100 million under management are

eligible or a 50% discount. NVCA members who contrib-

ute to the perormance database are entitled to receive key

benchmark reports or their respective vintage years during

the quarterly data collection process. For more inormation,

contact [email protected].

*to be considered a contributing member the rm must respond to the MoneyTree

venture activity surveys

Venture Capital Ofce Managers

Association (VCOMA)

VCOMA is a nationwide Association o Oce Managers

in the Venture Capital/Private Equity industry. VCOMA

brings together oce managers who support the private

equity industry to share ideas, resources, and inorma-

tion. VCOMA members a lso receive discounts rom many

vendors that private equity rms purchase products and

services rom on a regular basis. Al l NVCA Member rms

are eligible or one ree membership in VCOMA. Addi-

tional memberships are available to NVCA member rms

at a discount. To learn more about VCOMA, please visit

www.vcoma.com. NVCA members can sign up at:

http://www.vcofcemanagers.com/html/nvca.html.

NVCA is also a new Network Partner o the Microsot Bizsparkprogram which provides ree sotware to start-ups. Please see

article on page 17 or more details.

ontinued rom p. 22

8/14/2019 NVCA Today (4thQ2008)

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Upcoming NVCA EventsDecember 12 (12-1 pm EST)WEBCAST: Monitoring Portolio

Perormance: Corrective Action PlansPortolio Companies

Sponsored by Goodwin Procter LLP. Visit

http://www.nvca.org/webcast_11-21-08.htmlor more inormation and to register.

January 8, 2009 (5 7 pm)VCs@CES Reception, Table 10 Restaurant,

At the Shoppes in the Palazzo, Las Vegas, NV.

Please RSVP to [email protected].

January 23, 2009 (12 1 EST)WEBCAST: Beyond the Limited Partnership

Agreement: Issues or Challenging Times

Sponsored by DLA Piper LLPVisit www.nvca.org/events.html or more

inormation and to register.

January 26, 2009 (5:30 8:30 pm)

Early Stage VC Only Dinner, LAndana Grill,Burlington, MA

This is a NVCA Members Only event and is

complimentary thanks to the generosity oEdwards Angell Palmer & Dodge LLP.

Please RSVP to [email protected]

April 21, (6:30 9:00 pm)CEDs Venture 2009 Conerence,Investor-Only Dinner hosted by NVCA

Pinehurst Resort, Village o Pinehurst, NC.

To register or the conerence and dinner:http://www.cednc.org/conerences/

venture/2009/registration/

April 29 30, 2009

2009 NVCA Annual MeetingWestin Seaport Hotel, Boston, MA

Mark Your Calendars:May 4-5, 2010: 2010

NVCA Annual Meeting, Burlingame, CA

Other IndustryEvents o Interest

December

Dec. 7 9Alternative Investing Summit,Laguna Niguel, CA

www.opalgroup.net

Dec. 9Bio-Lie-Tech 2009, Baltimore, MDwww.earlystageeast.org

Dec. 9 10Mobile Media Investor Conerence,

San Francisco, CAhttp://www.strategyinstitute.com/email_les/

Mobile_Media_2008.pd

Dec. 10 11Invest Southwest, Scottsdale,Arizona State University

www.investsouthwest.org

January

Jan. 8 11International CES 2009, Las Vegas, NVwww.cesweb.org

Jan. 20 21Corporate Venturing & Strategic Investing

Conerence, Indian Wells, CANVCA Members should use discount code o

S-NVCA to receive discount.

www.ibconerences.comJan. 21 22Clean-Tech Investor Summit, Indian Wells, CA

Members should use discount code o S-NVCA

to receive discount. www.ibconerences.com

Jan. 21 22Private Equity International CFOs

and COOs Forum, New York, NY

www.peimedia.com

Jan. 27 28Private Equity Analyst Outlook 2009

Conerence, NY, NY

http://events.dowjones.com

February

Feb. 3 4Florida Venture Forum, Naples, FL

www.foridaventureorum.org

Feb. 9 11BIO CEO & Investor Conerence,New York, NY

www.bio.org/events

Feb. 11 12The PERE Forum Asia 2009, Hong Kongwww.peimedia.com/events

Feb. 16 17CED Biotech Conerence, Raleigh, NC

www.cednc.org

Feb. 23 25Cleantech Forum, San Francisco, CA

http://cleantech.com/news/events

March

Mar. 1 3DEMO 09, Palm Desert, CA

www.demo.com

Mar. 10 11Private Equity International Middle EastForum, Dubai

www.peimedia.com/events

Mar. 12 13Womens Private Equity Summit, Ritz-CarltonHal Moon Bay, CA

www.womensprivateequitysummit.com

Mar. 26 275th Annual Thunderbird Global PrivateEquity Investing Conerence

www.t-bird.edu/TPEC

Mar. 26 18CDVCA Annual Conerence, New York, NYwww.cdvca.org

Mar. 31 April 1InvestMidwest, Kansas City, MO

www.investmidwestorum.com

8/14/2019 NVCA Today (4thQ2008)

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Open rates or the NVCAToday newsletter are estimated to be 40-60%. In addition, NVCA Member Firm Point o Con-

tacts are asked to print out the pd version and distribute to entire rm.

The new advertising rates or the newsletter ollow.

Bundled Rate: $1,080 (10% discount) Includes banner ad in online newsletter (3 months duration), quarter page ad in

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nvca today (4thq2008)

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