Tuesday, November 24, 2009
New York Entrepreneur Week
Special Report from Jennifer Hill, Vice President, Astia
This past week, New York celebrated the largest entrepreneurship movement throughout the state: New York Entrepreneur Week (NYEW). Within the heart of the Big Apple, hundreds crammed into classrooms at Columbia Business School (and thousands watched live online) to hear from NYC’s leading entrepreneurs, venture capitalists, angel investors, industry leaders, technology press and more.
On Wednesday, I had the opportunity to moderate the NYEW Town Hall Meeting: Entrepreneurship Policy: Where Are We? Where Are We Going? How Will Entrepreneurship Revitalize the United States?
Joining me as panelists were:
• Adam Oliveri, Managing Director at SecondMarket (an online marketplace for illiquid assets)
• Luis Antonio Marquez, Director General of the Mexican Private Equity Association (over 45 funds and $12B under management)
• JiNan Glasgow, Founder & CEO of Neopatents (patent research and analytics company)
The lively discussion touched on a variety of topics, including how to restore liquidity to the U.S. markets, prominent sources of funding outside of the traditional venture capital / angel investment /high net worth individuals, and the role of tax credits. Yet some of the more interesting ideas grew from issues the panelists are tackling right now within their businesses. Here are a few highlights.
(1) Unlocking the value of intellectual property can be one the strongest ways to trigger innovation.
JiNan Glasgow, founder and CEO of Neopatents, believes that everyone has the power to create – and her work globally has focused on transforming ideas into reality and creating positive impact from them. Creating commercially valuable assets from ideas through intellectual property and entrepreneurial activity is the number one way to impact the economy. Patents and trademarks are the most highly valued intellectual property types, whose value can be leveraged if businesses know how to do it right. Strategic development requires answers, not just data, to inform investment and business decision-making. JiNan works with companies of all sizes – from start-ups to publicly traded companies – to leverage patent information to stimulate and accelerate innovation and to monetize the value of intellectual property to fundraise and grow the enterprise.
JiNan shared that many large public company have dozens of patents “sitting on the shelf” which can be used to test and develop new business lines, especially in an economic downturn when excess resources can be inexpensively deployed in new ways and start-up costs continue to reduce. Companies often find that that strength of such intellectual property secures investment from trusted sources which then enables a new company to grow on its own, often freed from the traditional timeline and pace of the founding company. Such opportunities often create further investment to combine efforts with emerging companies who have additional R&D, which accounts for a variety of early-stage acquisitions.
(2) Innovation will continue to prosper if illiquid markets can be accessed.
Adam Oliveri, Managing Director at SecondMarket, shared with the panel the benefits of secondary markets. The steady decline in IPO activity over the last 10 years and the dramatic rise and then sudden fall of M&A activity has left a market void for company exits attractive to investors. Increasing regulatory and administrative burdens also encourage companies to stay private longer, which challenges liquidity outlets. SecondMarket exists to give buyers and sellers a private secure marketplace to effect transactions -- subject to state and federal securities laws -- while providing a robust set of data, analytics and valuation tools instantly accessible online.
(3) What is the most surprising trend affecting cross-border transactions between the United States and Mexico?
Luis Antonio Marquez, Director General of the Mexican Private Equity Association, commented that U.S. venture capital firms have been investing south of the border both directly into private equity and venture capital funds and directly within Mexican enterprises. Mexico’s strong innovation and technology programs allow foreign investors to receive last mile grants when partnering with Mexican manufacturers, further stimulating investment. Mexico also encourages commercialization of pre-approved intellectual property – such as patents -- and will use foreign investment, technology and human resources to do so. For aspiring entrepreneurs, some of the strongest innovation can actually be found within the government and its research programs, which allow people to commercialize its pre-approved patents. Last and mostly interestingly, Mr. Marquez reminded us that the U.S. enjoys a Hispanic population of greater than 40 million people which represent the same GDP as Mexico. Savvy states such as Arizona and New Mexico are creating Hispanic Entrepreneurship Programs that provide training, resources, and capital to new businesses within the respective states and across the border leveraging Mexican commercial resources. As the segment of the population continues to grow, we can expect the cross-border development between the U.S. and Mexico to equally prosper.
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