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Sarah Lacy, Silicon Valley Host of Yahoo! Finance Tech|Ticker, Interviews Pascal, Sharon Wienbar (Scale Venture Partners), and Jessica Canning (Dow Jones/VentureSource) on Current VC Industry Trends

Last Thursday I joined Sharon Wienbar, Managing Director of Scale Venture Partners, and Jessica Canning, Director of Global Research for Dow Jones/ VentureSource, on Yahoo! Finance's Tech|Ticker program, hosted by Business Week's Sarah Lacy. We discussed issues ranging from opportunities in Clean Tech investing and the current state of tech IPO's to the implications of recent VC industry funding statistics and how entrepreneurs should manage their companies through an economic downturn. Two of the segments were posted this morning and can be accessed at http://finance.yahoo.com/tech-ticker

The Benefits of Being Disconnected

I started posting to this blog in January of 2005.  Today, with this post, I've posted 189 times.  In the interim, I've also become a podcaster on VC-InsideOut, and I am active on the Facebook and Linked-In social networks.  In some respects I am a power-user of the web because I am a venture capitalist specializing in information technology investing, but I also enjoy the medium of expression afforded by these tools that have truly created the endless open-ended conversation with the world that defines the social Internet. 

But there is such a thing as being over-connected on the web.  A symptom:  the gnawing sense of obligation that you might feel to keep your content fresh-- especially the little things, like changing your blog and Facebook pictures, or endlessly thinking of something pithy to say on your Facebook status bar (or on Twitter).

I usually post more actively when I am on vacation, but this past week, I unplugged totally for the first time in too long. 

No email, no phone, no blogs, no keyboards, no laptop--  but I did have my digital camera.

Being in Fiji was a key ingredient to the mix, as were several good books and plenty of great conversations with fellow travellers.  One of the more unusual recurring themes on this trip was meeting a number of people from all over the world who had quit their jobs and were in various stages of taking a year off from the working world-- having visited many countries and experienced life from a completely different perspective.  Most of these people were between 22 and 32 years old, and many had IT backgrounds.  Fiji can be very attractive if you are on a limited budget; maybe this concentration of checked-out global travelers was a function of the attractive and cost effective environment, but it still surprised me.

My week of electronic abstinence evolved into a mini-course in restoring perspective, in slowing down response time, and in generally re-charging my batteries for 2008.  I recommend periodic disconnection from the web for everyone.

Speaking of connectivity, I'm looking forward to CES!

Happy New Year!

   

New Podcast Program-- Masters of DLP (Data Loss Prevention)

One of our portfolio companies, Reconnex, which is one of the leading providers of DLP solutions, has launched a new podcast series, Masters of DLP, interviewing customers on the security challenges that they face from within their organizations.  Some of the questions addressed by the likes of Randy Barr, Webex CSO, and Tom Bowers of Security Constructs include:

What is Data Loss Prevention or Protection (DLP) and why do I need a DLP solution? What are some of the common problems when deploying a DLP solution? What business benefits will I experience from a DLP solution?

Reconnex tackles these and other important DLP questions head-on in this series of interviews and editorial commentary. Each episode makes clear recommendations about best practices that can be useful to anyone deploying or thinking about a DLP solution.

The content is worth listening to.

Do You Know Your Responsibilities as A VC Director? Find Out at VC-InsideOut

I've received numerous requests to do a podcast on VC-IO about "A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors".  Episode 5 of the VC-IO Governance Series, "Basic VC Company Director Responsibilities", is now available.  To stream or download, please click here.

Something Old and Something New

While the podcast reviews some of the key elements of "A Simple Guide...", which is the collaborative white paper co-authored by twenty two members of the Working Group on Director Accountability and Board Effectiveness, it also previews  "A Simple Guide...v2.0", which we are currently planning to release in September.

In addition to incorporating feedback from CEOs and other directors who have used the guide, v2.0 features a new section that maps internal controls to levels of company development.  For example, boards should have in place internal controls governing the segregation of duties during the seed/technology development stage and consider the implementation of governance processes by the board as a whole.  The podcast also comments further on annual director self evaluations and methods to facilitate conducting 360 degree director peer reviews.

Joining the NVCA Board of Directors

At the 2007 National Venture Capital Association (NVCA) annual meeting, I was elected to the NVCA board, where I now serve on the NVCA's Education Committee along with Ira Ehrenpreis of Technology Partners and Terry McGuire of Polaris Ventures. In addition to Ira and me, six other venture capitalists join this year's class of incoming board members-- Jim Hale, FT Ventures; Paul Maeder, Highland Capital Partners; Kate Mitchell, Scale Venture Partners; Roger Novak, Novak Biddle Venture Partners; David Prend, Rockport Capital Partners; and Jonathan Root, US Venture Partners. Each of us will serve a four year term.  In conjunction with the incoming directors, Ted Schlein of KPCB has taken the gavel from outgoing chairman Bob Grady of Carlyle.

Since this blog's inception in 2005, a substantial portion of its content has been devoted to discussing questions of professional education, emphasizing director responsibilities and best corporate governance practices in venture capital. I've been writing about these issues in public since 1999, and Levensohn Venture Partners added podcasting as a tool to promote these professional education outreach efforts last year with the creation of the VC-InsideOut Governance Series.

Education in our industry involves educating regulators, legislators, and other public policymakers about the importance of venture capital to the U.S. economy, and I intend to use my new role in our industry association to extend the reach of the best governance practices work that I've driven through collaborative white papers, webinars, podcasts, and speeches at VC industry forums since "After the Term Sheet..." was first released in 2003.

Continuing to educate myself about the increasingly complex business and regulatory environment in which we operate is an ongoing process, and I am honored to have the opportunity to contribute to the NVCA's leadership in this important area of professional development.

How Do You Know If You Have the Right Internal Controls in Place? Ask VC-InsideOut

Pascal Levensohn interviews Leinani Nakamura and Kathy Hunter, who are both professionals at the accounting firm of Mohler, Nixon & Williams.  They discuss the need for effective internal controls inside emerging venture companies and why all VC company directors need to consider having proper diagnostic processes in place.  The podcast concludes with comments on the PCAOB’s forthcoming revisions to Sarbanes Oxley’s Section 404 reporting standards.

Some excerpts from the podcast:

Q (Pascal): Why are internal controls so important today?

A (Leinani): Internal controls have always been important.  Let’s remember that internal control is not a new concept – it’s been around for a while.  COSO issued its integrated framework in 1992 and that is the framework used by most companies today.  I think many companies forgot the importance of strong internal controls, and the Sarbanes-Oxley Act of 2002 re-focused public companies on the importance of strong internal controls.

Q: Why is this relevant to private companies?

A: The fundamental concepts surrounding effective internal controls are the same for small companies and large companies.  The framework, or components of an effective system of internal controls – the control environment, risk assessment, control activities, information and communication, and monitoring – are the same regardless of a company’s stage of development.  But how each company achieves effectiveness will look different based on its size and complexity, and will change over time as a company changes.

Q: How does the Board fit into the Company’s internal controls?

A: The Board is a very important component of the Company’s internal controls.  It is part of the control environment, and to that end, sets the “tone at the top” and ethical environment of the Company.  It is also part of the monitoring component – Board responsibilities typically include monitoring the internal controls systems put in place by management.

Q: The duty of oversight is a critical fiduciary duty of directors, and it appears that the process area you are talking about falls squarely under the purview of the audit committee.  But I can already hear early stage companies screaming about how they can’t  afford the burden of good internal controls…

To listen to the podcast go to VC-InsideOut

What's New in Personal Robotics? VC-InsideOut Knows

Our latest installment of VC-IO's Entrepreneur Series, Personal Robotics, is now available.

Kip Sheeline interviews Stanford Professor Ken Salisbury and doctoral student Eric Berger about the groundbreaking Personal Robotics platform they are developing at Stanford, in collaboration with Professor Andrew Ng of Stanford’s Computer Science department and Keenan Wyrobek, a doctoral student in Mechanical Engineering. This platform will ultimately permit the ‘human safe’ use of robots for domestic and other non-factory applications.

If you are interested in seeing videos of the first generation platform, please go to http://personalrobotics.stanford.edu/videos/ and, when prompted for a password, enter “LVP”.

Public Company Lessons for VC Directors on VC-InsideOut

The third episode of the VC-InsideOut Governance Series is now available on the VC-IO site.  Our guest is Professor Pastora Cafferty, an experienced public company director who currently serves on the boards of Waste Management, People’s Energy, Harris Financial, and Kimberly Clark.  In the non-profit world, she serves as a director of Rush University Medical Center and the Lyric Opera of Chicago. 

In addition to being a professor emerita of the School of Social Service Administration at the University of Chicago, Pastora has done some pretty interesting things in her career.  A native of Cuba, she has been a White House Fellow, Smithsonian Research Fellow, and a Wall Street Journal Fellow and has written on race and ethnicity in the U.S. 

As a long-serving public company board member, Cafferty offers her perspective on questions of board compensation committee independence and the continuing options back-dating scandal.  She comments on the transformation of board leadership in public companies post SarbOx, the limits of compensation committee authority, the need for close interaction between the audit and compensation committees, and the importance of timely, formal CEO reviews.

You Can Listen to a Podcast on Your Phone

A new service called Podlinez allows you to dial in to a phone number and listen to a Podcast on your phone.

You just have to provide the RSS feed for your podcast URL, and you are ready to go.

The VC-InsideOut Governance Series can be accessed at 510-495-6322.

The VC-InsideOut Entrepreneur Series can be accessed at 510-495-6323

Podlinez keeps the most recent episode on the line.  Pretty cool.

Kevin Compton of Kleiner Perkins is Featured on VC-InsideOut

“Achieving Investor Alignment in the VC Boardroom”

Continuing the VC-InsideOut Governance Series, Kip Sheeline of Levensohn Venture Partners interviews Kevin Compton of Kleiner Perkins Caufield & Byers on venture board alignment issues.  Kevin thoughtfully and candidly discusses his decision making process when evaluating competing term sheets with different economic terms, how he values human capital compared to dollars in the boardroom, and how he addresses conflicts of interest posed by co-investors with differing risk profiles.

To access the podcast, go to www.vc-io.com