Governor Deval Patrick and Medicon Valley Officials after signing collaboration agreement at 2012 Bio International Convention on 6/20/12. Photo by Anita Harris, Harris Communications Group.

“It’s not about what we can give you or take; it’s about how we can share.” So said Massachusetts Governor Deval Patrick before signing a collaboration agreement with officials from Medicon Valley MOU –located in the Capital Region of Denmark, Region Zealand in Denmark and Region Skåne in Sweden. The  agreement was one of two  partnerships signed today between Massachusetts and European regions. The second was with Catalonia, Spain.  Both  agreements were signed at the BIO International Convention.

“Our innovation economy is thriving here in Massachusetts and establishing and encouraging international partnerships is an important part of our future growth,” Governor Patrick said. “Catalonia and Medicon Valley are important regions in Europe’s innovation sector, and these partnerships will allow us to move forward on our mutual goals in this part of the global economy.”

The Medicon Valley memo of understanding (MOU) was signed by Governor Patrick and officials from the Capital Region of Denmark, Region Zealand in Denmark and Region Skåne in Sweden.

The agreement focuses on enhancing research partnerships in life sciences by an exchange of researchers and students; identifying special projects, partnerships or collaborations that can lead to new or enhanced research opportunities; and establishing a framework to be used in joint projects that could be financed by the European Union or National Institute of Health to develop new products and processes that can be used in the global market, according to a press release furnished by the governor’s office.

Medicon Valley is a bi-national region composed of the island of Zealand in eastern Denmark and the Skåne region of southern Sweden. It is home to over 200 companies in biotech, med-tech, and pharmaceuticals with over 350 additional companies in those fields having affiliate or branch offices in the region. These industries employ 40,000 people.

The MOU with Catalonia, Spain was signed by Governor Patrick and the President of Catalonia, Spain Artur Mas I Gavarro, with U.S. Ambassador to Spain Alan Solomont present for the signing. The Patrick-Murray Administration has partnered with the Catalan Government to put real collaboration into a renewed agreement on the 20^th anniversary of Lieutenant Governor Paul Cellucci signing a Declaration of Intent of Cooperation in 1992 between Massachusetts and Catalonia, according to the release.

The agreement facilitates collaboration in the following areas:

a)         Bilateral cooperation in research, and technological and industrial innovation;

b)         Business cooperation and economic development in key productive sectors, especially in life sciences, renewable energy, information technology, advanced manufacturing and infrastructure, and;

c)         Academic cooperation.

Catalonia has pursued a policy similar to Governor Patrick’s of investing in the innovation economy. Areas of convergence include the life sciences, mobile devices, clean energy technology, and advanced infrastructure. In 2011, Spain was Massachusetts’ 21st largest export partner, with Massachusetts exporting approximately $326.99 million worth of goods and services.

The BIO International Convention provides Governor Patrick, Lieutenant Governor Timothy Murray, state and industry leaders with an opportunity to showcase Massachusetts as a global leader in the life sciences industry, and the preeminent place for life sciences companies to invest in and expand. On Tuesday, Governor Patrick announced the first round of grants awarded under the Massachusetts-Israel Innovation Partnership (MIIP). MIIP is a formal collaboration between the State of Israel and the Commonwealth of Massachusetts to encourage and support innovation and entrepreneurship between Massachusetts’ and Israel’s life sciences, clean energy and technology sectors. A total of at least $1.3 million is being awarded to four research & development (R&D) collaborations between Massachusetts and Israeli companies that have been jointly approved by the funding agencies on both sides. The total budget of the awarded projects is estimated at approximately $3 million. The Massachusetts awardees are located in Natick, Needham, North Billerica and Wilbraham.

Earlier on Wednesday, the Governor joined seven global biopharmaceutical companies to announce the formation of the Massachusetts Neuroscience Consortium. Participating companies include Abbott, Biogen Idec, EMD Serono, Janssen Research & Development, LLC, Merck, Pfizer and Sunovion Pharmaceuticals Inc. The Consortium will fund pre-clinical neuroscience at Massachusetts academic and research institutions.

Governor Patrick’s ten-year, $1 billion life sciences investment package has strengthened the state’s global leadership in the life sciences. The initiative melds all of the state’s key resources in order to spur research, investment, innovation and commercialization. Now the life sciences industry in Massachusetts is thriving, with more than 52 percent job growth in the biopharma sector since 2001 and more than 80,000 employees working in the life sciences.

–Anita M. Harris
New Cambridge Observer is a publication of the Harris Communications Group, an award-winning  public relations and marketing communications agency located in Cambridge, MA.

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Newspapers have long kept tabs on the changing world–but have themselves been slow to modernize. To  flourish these days,
when anyone with a computer can be a publisher,  news organizations must develop a “culture of innovation. ”

So said Richard Gingras, the head of News Products at Google,  on May 11, 2012 in a talk at Harvard’s Nieman Foundation.

Gingras, a founder of Salon.com and long-term media technologist , said “I push people to rethink every aspect of what they’re doing”–including their mission, ethical guidelines, how they interact with their audiences, transparency regarding sources,  and even whether reporters divulge their personal political positions. In light of today’s powerful new technologies and human interactions,  “innovation  must be part of an organization’s DNA,”  at the core of newspapers’ culture, and  incorporated into “the role of every member of the team.”

Gingras pointed out that this by no means the first “disruption” time for the media.  With the advent of television,  for example, newspaper advertising declined and in some cities, the number of newspapers went from five to one or two.   This was not great for the newspapers that went out of business and  led to monopolitistic control by the  survivors. But it also led to    “40  golden years of profitability” for those survivors.

Today, the Internet has “disaggregated” the advertising economy., he said.  No longer do consumers look to their local newspapers for car ads, for example: rather, they search the Internet for information and deals.  “In the past, you could have an ad in the New York Times for Tiffany’s near an article on starvation in Darfur… or articles for garden centers in  the Lifestyles section,” Gingras said.   But on the Internet, such “vertical models” for advertising  are not effective.  ” Might news organizations’ Web sites do better as “a stable of focused brands with independent business models?” he asked.

Gingras also suggested that news organizations:

• Optimize news Web sites for multiple entry points,  because individual story pages are, today, more valuable than first or home pages. These individual pages should be updated so that urls remain constant–thus optimizing search engine results.

• Include more “computational journalism”–in which reporters post interactive information tables that would allow readers to answer their own, individualized questions.  For example, in a story on the state of education, provide tables showing student progress in school districts across the city–so that parents could assess statistics on their own children’s schools

•  Leverage the assistance of  “the trusted crowd”  (interact with readers and keep them involved)

•  Make reporters responsible for updating their own stories–with “constant” urls  to encourage multiple visits to their pages

Gingras also said that  in a culture of bulletpoints, updates and posts,  there  is low return on investment for long articles–and advised keeping articles  under 500 words.

So  I’ll quit here–at 494.

A video of the complete talk  is posted at: http://www.nieman.harvard.edu/newsitem.aspx?id=100198

–Anita M. Harris

Anita Harris, a former national journalist and Nieman Fellow,  is president of the Harris Communications Group, a marketing and communications firm located in Cambridge, MA.

For entrepreneurs seeking venture capital funding, there’s good news—and there’s bad news. The good news is that  it’s easier now than at any time in the last ten years to get relatively small amounts of seed money. The bad news is that it’s harder to obtain “A Round” or additional series funding after that.

That was the consensus of  three Boston area venture capitalists who spoke at the Cambridge Innovation Center on  Wednesday, May 2.  Moderator Ben Hron of  law firm McCarter -English, which sponsored the event, asked the VCs  how the 2008 economic downturn  has impacted the VC industry;  where things stand now,  and what they foresee for the future.

Impact of the recession
A changing industry
Jo Tango, founder and partner of Kepha Partners, which invests in early stage companies, said that for many VC firms, this is a period of innovation. “We call it VC 2.0,”  he quipped to the audience of  entrepreneurs.  The VC industry, which started in about 1980, used to be dominated by approximately 20 major firms; today, there are more smaller, more specialized VC firms, he said.

David Beisel, co-founder and partner of  NextView Ventures, a dedicated seed-stage venture capital firm focused on Internet startups, said that the downturn has “facilitated a  maturation process,” which he likened to what happened in the beer industry in the 1990s.

That is, “You had to be either one of the biggest, like Anheuser-Busch—or a microbrewery.” Mid-size companies like Genesee fell by the wayside.

Likewise,  today,  he said, “VC firms are no longer trying to be all things to all entrepreneurs; they’re taking a dedicated approach.  Recently, four or five firms raised more than $1B but mid-sized firms are struggling.”

CA Webb, Executive Director of the New England Venture Capital Association, said that considering this a time of “introspection and innovation” is “optimistic…The reality is that the industry is taking a hard look at itself. Some say that the ‘sky is falling,’ because there’s less money being invested; this means that some firms will shut down. Those that succeed will need to articulate clearly just what they are willing to offer and to whom.”

Tango pointed out that “Innovation [in the VC industry] creates a challenge for entrepreneurs because VC firms are “all over the map,” and “it’s difficult to know which one is right for [a particular startup]. It’s easier now to get seed money–but terms are often more difficult to distinguish.”

Current trends
In asking the panelists for their views on the current venture funding situation, Hron shared Q1 2012 statistics showing  a large number of deals but a drop in total funding compared with previous quarters– in indicating fewer “megadeals.”  “Should entrepreneurs should be optimistic because of the number of deals or pessimistic about the size of the deals?” he asked.

Fewer large deals
Tango responded that one reason for the decline in large deals has to do with the number of deals VCs have previously closed.  In the current economic climate, he explained, it’s difficult raise a stream of money. In a recent study of five VC Web sites, his firm found that many VCs are already sitting on the boards of 10-17 companies in which they have invested. “If you’re fundraising…if you’re already on 15 boards, you need to spend your time fund raising,” not sitting on additional boards.

Smaller investments
Beisel described what he called a longer term trend:  in some sectors, especially digital media, companies don’t need to raise as much money for initial funding as in other sectors–so at earlier stages, the venture community is reacting by not writing $5M checks but rather $1M or .5 M.

In Webb’s view, “seeding is now like the old Series A funding: there is a lot of seed money to go around but Series A is now looking like the old series C “(IE–difficult to come by).

Follow-on funding can be problematic.
Tango agreed –describing a firm that backed 20 companies with seed money but told him it will provide only 2 % of those with Series A funding.  He added that the situation is even more complicated because even at the “seed stage,”different VCs require different terms.

In fact, he recommended, “Ninety per cent of startups should be bootstrapped (funded by self, friends and family) because other investors expect that they will get their money out within a few years. “With VC funding, you’re becoming a fiduciary…taking on ‘credit card debt’ that you will need to pay back.”

In Beisel’s view, before taking any money from VCs, an entrepreneur needs to know how outsiders view the firm, the reputation of the VC firm, which partner will be best for the company, and whether the firm usually adds to series funding or “will you be one of the 98% that get dropped?”

Health care vs. other  investment
Citing a decline in financing for health care ventures in Massachusetts compared with increased financing for Internet and mobile technology, Hron asked if investors are seeking short-term gains as instead of  taking the long view required for biotechnology and pharma payback.

Webb responded that one reason for the slowdown in health care company funding is that the US Food and Drug Administration is taking longer to approve products so the horizons for investors are longer. As a result, investors are shifting toward healthcare technology, “big data” and products that will bring a quicker return.

In Beisel’s view, “Over the last ten years the returns for health care investment have not been that great; health care is now even more challenging. But VCs won’t shift to other spaces; the money just won’t get raised.”

Long -term trends
According to Hron, the data suggest a rise in VC investing in Washington State, Texas, and Illinois. “Are we seeing the rise of a national VC community or is this a blip?” he asked. “And will VC investors look at companies nationwide?”

Tango and Beisel agreed that large investors are looking at companies nationally and internationally–especially in the Internet space.

They also agreed that it’s unlikely that VCs will spring up in Kansas or in “third-tier American cities,” as Beisel; put it.  In Tango’s view, “they will still be centered in Boston, NY and California.”  Beisel pointed out that that VC firms are on the rise in nations like Argentina and Eastern Europe.  According to Webb, “Capital clusters around academic institutions: You won’t see much density elsewhere.”

Crowd sourcing
Regarding the  recent passage of legislation allowing corporate fundraising through crowd sourcing, panelists expressed concerns about possibilities for fraud and entry of organized crime; and also  that unsophisticated investors might not know that seasoned professionals expect to lose money on most  investments—in hopes that a few will have big payoffs.

Asked by Hron if VCs will look askance at companies raising initial funding through crowd sourcing, Beisel said  that it’s fine to get seed money wherever you can but a “real company” will need institutional investors in order to grow large.

In Tango’s view, “Your source of funding depends on what you want to accomplish: Do you just want to get money…or are you looking for series of VC rounds, advice and support?”

PANELIST BIOs

David Beisel – David is Co-Founder and Partner of NextView Ventures, a dedicated seed-stage venture capital firm focused on investments in internet startups.  Previously he was an investor at both Venrock and Masthead Venture Partners, where he served on the boards of BlogHer and Gazelle.  Prior to joining Masthead, he co-founded Sombasa Media, an e-mail marketing company which was successfully acquired by About.com and subsequently became a division of Primedia (NYSE: PRM), where he served as Vice President of Marketing.  He is also the founder of the Web Innovators Group, a quarterly entrepreneur-focused event which attracts nearly a thousand attendees.  David blogs atwww.GenuineVC.com.

Jo Tango – Jo is Founder and Partner of Kepha Partners, an early-stage venture capital firm.   Previously, Jo spent was a General Partner at Highland Capital Partners, where he worked for nearly nine year, and before that he spent five years with Bain & Company.  Jo has invested in the e-commerce, search engine, Internet ad network, wireless, supply chain software, storage, database, security, on-line payments and data center virtualization spaces.  He has been a founding or first institutional investor in Azuki Systems, Bit9, ExaGrid, StreamBase Systems, Vertica Systems (acquired by Hewlett-Packard), Virtual Iron (acquired by Oracle) and VoltDB, getting involved nearly always at the company inception phase. Other investments include Ask Jeeves (Nasdaq: ASKJ), Digital Market (acquired by Agile Software), and NextCard (Nasdaq: NXCD).

C.A. Webb – C.A. became the Executive Director of the New England Venture Capital Association in January 2012.  Members of the NEVCA include more than 700 venture capital professionals from over 100 firms that collectively manage more than $50 billion in capital.  C.A. has spent her career in entrepreneurial roles with mission driven, early stage and high growth organizations. Her work has focused on breakthrough business models in a diverse array of industries including retail and packaged goods (Whole Foods Market), consumer internet technology (Care.com), sustainability (Preserve Products), historic preservation (Trinity Boston Foundation), public education (Boston Collegiate Charter School), and publishing (Fast Company magazine

Tim Rowe, CEO of the Cambridge Innovation Center in Kendall Square, gave a great talk at HarrisCom Group’s recent Pitching for Business Workshop on Feb. 23.  Among his main points: “Elevator pitching is like dating:” the goal is to find out if it’s worth spending more time with the person you’re speaking to. Tim is also a venture capitalist and president of the Kendall Square Association in Cambridge, MA.

Here are links to the video and to the blog I wrote on the HarrisCom Web site.

Link to video
Link to blog  

–Anita M. Harris
Anita M. Harris is president of the Harris Communications Group of Cambridge, MA, an award-winining public relations 3.0 firm specializing in strategic integrated marketing communications and thought leadership  for clients in health, science, energy, technology and education, worldwide.