Archive for the ‘Levensohn Venture Partners’ Category

Keynote Speech at the Global Security Challenge, Chicago, September 22

imagesI will be the keynote speaker at the America Midwest Regional Final competition of the Global Security Challenge (GSC) on September 22nd in Chicago.  This event is part of a global competition to deliver innovative solutions to pressing cybersecurity problems.  The GSC Security Summit 2009, which will be held November 13 in London, will see the culmination of the six regional finals held around the world in September and October.  The Summit will include the final pitches from each regional finalist in the SME and Start-up categories, as well as the ‘Dragon’s Den’ style closed-door Q&A with the expert Judging Committees. The award categories are:

  • Best Security SME
  • Most Promising Security Start-up
  • Most Promising Security Idea

Top contenders from previous Global Security Challenge competitions have subsequently raised over $55 million in new capital.  The current open competition is for the “Most Promising Security Idea”:

The GSC committee recognizes that there are many potentially disruptive innovations that have yet to reach commercialization. Through the Most Promising Security Idea category, the GSC encourages innovators to continue to pursue their ideas and efforts. The award is designed to support and promote researchers, infant companies (with no revenue), and any other inventors who just have an idea for a security solution.

The winners of this category will receive:

  • $10,000 cash grant, sponsored by Accenture.
  • Mentorship from Mark Shaheen, managing director of Civitas Group.
  • Unparalleled networking opportunity with government officials and industry leaders.
  • Invaluable publicity.
  • Examples of our areas of interest are (but are not limited to): biometrics, detection sensors, cyber security, video surveillance, RFID, personnel protection, encryption software, data-mining, biotechnologies, and explosive trace detection. Who can Apply?: Eligible entrants must be a company, or one or more individuals, whose idea did not generate revenue in 2008.Deadline for Submissions: September 1, 2009 at 11.59 GMT.

For more information on the GSC CLICK HERE.  I am proud to be involved with this competition as it represents the type of innovation challenge that drives entrepreneurs to develop breakthrough ideas into real companies.

Wall Street Journal Opinion Column: Don’t Strangle Venture Capital With Miles of Red Tape

The Wall Street Journal published a combined version of  my letter to the editor in response to the Washington vs. Silicon Valley editorial of August 7 with letters from Harry Edelson (another First Boston alumnus from the ’80’s), and Ryan Phillips (whom I do not know).  My blog post of yesterday is a longer version of the letter that I sent to the editor.  Scott Austin has written a lively column today on this topic in Venture Capital Dispatch.  The opinion piece elicited 60 comments as of the date of this post covering a wide range of opinions on this important topic.

I think it’s very important that readers separate their personal feelings about venture capitalists from the capital markets issue.  Small cap IPO’s are necessary to restore job growth in America, regardless of whether they are venture backed or not.  If we don’t restore a robust market for initial public offerings of companies raising less than $50 million, America loses, and that has everything to do with promoting entrepreneurs.

Bob Ackerman of Allegis Capital– America Depends on Entrepreneurs While Current Public Policy Assaults Them

Images On June 25th I moderated a panel on the implications of America’s
Innovation Crisis for Cybersecurity at the National Press Club in
Washington, D.C.  The full transcript of the slides integrated with my
prepared remarks is now posted at www.levp.com .  This event was sponsored by the non-profit Security Innovation Network.

At the end of the panel I asked each of the panelists, Bob Ackerman of Allegis Capital, Professor Randy Katz of Berkeley, and Dave Robbins of BigFix, to answer the following question:

“In closing, I would like each of our panelists to comment on the most
important change that they would like to see implemented in order to
promote the protection of our nation’s critical infrastructure.”

Bob Ackerman’s answer follows:

“The solution to the critical needs of our country  – whether it is in reinventing our economy or the innovation that is essential to protecting our nation’s critical infrastructure – will depend on the creativity and drive of entrepreneurs. At precisely the same time that political leaders are calling for expanded innovation to meet our national needs, there appears to be an almost all out assault on entrepreneurship in America – by deed if not by word.  Capital and talent are the two most valued and at the same time portable assets in the global economy.  For more than three decades, the United States was the destination for the best and brightest minds from around the world.  In the US, brilliant entrepreneurial risk takers found the resources they required to implement their dreams and an environment that rewarded those that took the risks associated with innovation – and succeeded.  Today, we are making it increasingly difficult for the best and brightest to come the US and stay to contribute to our economy. For those that are here, we are increasing the regulatory hurdles associated with building successful businesses while increasing the taxes associated investments make in long term innovation.  Stock options – once the great wealth builder for employees in start-up companies – have had much of their value striped by regulatory changes.  When combined with the current political overtones that suggest people who have achieved wealth must have somehow “cheated”  – we have created an environment where the risk/reward associated with high risk entrepreneurial innovation is seriously out of balance.  At precisely the same time where we are more dependent than ever on an innovation-driven economy and our competitors have borrowed our historical playbook – we are effectively erecting barriers to innovation in America.”

How should we respond?  We need to attract and retain the talent and capital necessary to fuel the engine of innovation.  We need to attract capital and encourage focused, systematic innovation through modifications in our tax code.  Lower tax rates for long term innovation is an excellent place to start.  We need to rethink our approach to regulation with a more constructive understanding of the levels of risk associated with (and appropriate regulation) companies as they grow and prosper.  A successful start-up company and a multi-billion dollar global player should not be subjected to the same level of regulatory oversight – in most cases. Further, our immigration policies need to focus on encouraging the world’s best and brightest to come to the United States, benefit from our educational system and remain here to contribute to our economy.  Today, our policy in this area can almost be described as “Here’s your PhD. – now go home!”.  Rest assured – the capital will follow the talent.

In parallel with the above, we need to take concrete steps to encourage companies to grow in the U.S.  This is a combination of the steps I have previously mentioned while making it easier for young companies to go public – tapping the capital they need to continue growing and adding high paying jobs to our economy.  Regulatory reform can address some of these issues but the venture industry also needs to take responsibility for re-invigorating the investment banking environment upon which a vibrant IPO market is dependent. This is an area where experience will matter.  For example, venture professionals who have lived successfully through these challenges in the past – have an invaluable historical perspective that can contribute to this revitalization.  Unfortunately, many have left or are leaving the industry.  Why – it’s become harder and harder to be successful while the rewards are being diminished.  They either retire – or they follow the entrepreneurs who are voting with their feet and talent and moving to greener pastures – in other countries.

Live Radio Broadcast Today on American Innovation Crisis at 4PM EDT/ 3PM CDT/ 1PM PDT– Robert Rodriguez of Security Innovation Network and Pascal Levensohn Interviewed

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Scott Draughon, Anyck Turgeon, Robert Rodriguez, Pascal Levensohn

At 4 pm EDT on June 17 Robert Rodriguez, chairman of the Security Innovation Network, and I will discuss the recession’s implications on the continuing pace of American innovation on MyTechnologyLawyer, a live radio show.

The title of the hour-long show is “The Innovation Crisis in America.” The format for the show will be conversational, and I expect that our hosts, Anyck Turgeon of Crossroads Systems and Scott Draughon, originator and the main host of the show, will elicit some provocative answers through their questions.

Among the questions that we will discuss:

What is Innovation?
What supports the argument that there is an innovation crisis in America?
How does Silicon Valley fit into the innovation ecosystem?
How has global competitiveness changed over the past decade, how do observers measure changes in competition, and what does this mean for America?

Listeners can tune into the show live by going to this link: CLICK HERE

The show will be recorded and accessible for downloads at your convenience at www.mytechnologylawyer.com/crossroads .

Whither Venture Capital– A Constructive Perspective from the Kauffman Fellows Program

images-2There is plenty of ink flowing with speculation on the future of the venture capital industry.  Phil Wickham, CEO of the Kauffman Fellows Program, has a constructive perspective on this topic, which he expressed in his CEO recap in the Kauffman Fellows Program eBulletin that was published on June 2.

Below, I’ve quoted his key observations from the newsletter, with which I agree:

“… I [have] found two camps regarding venture capital: the majority believes venture is the answer to all our needs (mostly entrepreneurs) and the minority seems to think that the entire industry couldn’t fall of the edge of a cliff fast enough (mostly policy and academia). I have to say that the whole thing alarmed me, since we so strongly believe that the answer is nuanced and solidly in the middle of these two extremes. The CVE’s [Center for Venture Education] DNA is that of an “entrepreneur-first” organization, growing out of the culture and values of Mr. K [Ewing Marion Kauffman] and his Marion Labs team that put together and operated the Kauffman Foundation.

Since our full independence from the [Ewing Marion Kauffman]Foundation in 2001, our focus has been to anticipate as much as possible the evolution of the entrepreneur’s needs and opportunities, since we are management’s primary service provider. As a result, we have included the unique expertise of tech transfer funds, angel groups, corporate venture funds, international government seed funds and even foundation investors in the Kauffman Fellows Program as we strive to build a curriculum with maximum value for our customers.

… We’ve concluded a few simple things. First, that entrepreneurial capital is about enabling scale, and the value we deliver as an industry is much the same at any stage or in any environment. Second, that the CVE’s intellectual capital built up over the past 15 years is broadly applicable across all forms of entrepreneurial capital. Third, within that body of knowledge, our evolving expertise in leadership and managing the human dynamic has far more long-term impact than anything else we do. Finally, we are starting to discover that there is a much broader opportunity to spread this leadership know-how to all of the players in the eco-system: university researchers, entrepreneurs, LPs, government policy experts and service providers. We think that if – across the globe – each positional player can come to understand their own and each other’s roles and put their collaborative talents and energies behind the entrepreneur’s imagination, the world will be a better place for our children to inherit.”

Taking Silicon Valley’s Innovation Message to Washington: A Special Event on Cyber Security at the National Press Club June 25th Sponsored by the Security Innovation Network

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Four years ago I became very concerned that the threats to our nation's critical infrastructure from cyber attacks were not only increasing, but that the escalating risks to our country's economic and national security were being largely ignored outside of the intelligence community and small groups of innovative entrepreneurs focused on addressing this problem.  Through Levensohn Venture Partners' involvement as the lead venture sponsor of the IT Security Entrepreneurs' Forum (ITSEF) since its inception in 2007, and through my personal initiatives advocating public policy solutions to address cyber security issues, I have had some positive impact in increasing awareness of this problem.  The non-profit Security Innovation Network, on whose board of directors I now serve, is taking this message to Washington on June 25th. I am joining an unusual group of thought leaders crossing big business, small business, academia, venture capital, and government who have all come together to address the urgent need for solutions to our nation's cyber security vulnerabilities:

Admiral (Ret.) Michael McConnell
Sr. Vice President, Booz Allen Hamilton
Former Director National Intelligence
 
David Cullinane
Chief Information Security Officer
eBay

Tony Sager
Chief Vulnerability Analysis & Operations
National Security Agency
 
Jerry Archer
Chief Information Security Officer
Intuit

Randy Katz
United Microelectronics Corporation Distinguished Professor
EE and Computer Science Department, UC Berkeley
 
Dr. James Finley
CEO, The Finley Group
Former DOD Deputy Under Sec.
Aquisition & Technology

 

Dave Robbins
Chief Executive Officer
BigFix
 
Bob Ackerman
Allegis Capital
Managing Director and Co-Founder

 
John Weinschenk
Chief Executive Officer
Cenzic

 
Steve Elefant
Executive Director
Heartland Payment Systems

 
Robert Rodriguez
Chairman
Security Innovation Network

 
David Bryan
Executive Vice President
ManTech International

 
Dr. Douglas Maughan
Program Manager
Department of Homeland Security S&T

 
Bob Bragdon
Publisher
CSO Magazine

 

A brief description of my panel follows:

The Innovation Crisis in America—Implications for Cyber Security

The global financial crisis has exacerbated long-term negative trends
undermining the foundations of America’s economic growth engine.
Entrepreneurs, corporate and academic research and development
professionals, and venture capitalists are inextricably linked together
in this crisis. Declining spending on basic research by the U.S. Government and universities, reduced corporate R&D expenditures,  and systemic risks to the integrity of the venture capital growth engine are converging to undermine the development of cutting
edge future solutions needed to protect our country’s cyber security.
This perspective from two venture capitalists, a leading academic, and
a successful security entrepreneur highlights the interdependence of
these communities and the implications to our country’s prospects for
sustainable economic growth, new job creation, and national security.

Panel Chair: Pascal Levensohn

Panelists:

Dave Robbins, CEO BigFix
Bob Ackerman, Managing Director & Co-Founder, Allegis Capital
Randy H. Katz, United Microelectronics Corporation Distinguished Professor, EE & Computer Science Department UC Berkeley
Co-Chair, Committee on Assessing the Impacts of Changes in the
Information Technology and Research and Development Ecosystem, National
Research Council of the National Academies

Attendance at this special event will be limited to 125 applicants.

Registration Fee: $75.00

Registration Fee for Government Employees: $45.00

Registration Fee for Media: No Charge

For more details about the Security Innovation Network and this special event, CLICK HERE.

Getting From Here to There– It’s Time to Engage in Common Sense Approaches to Public Policy

I usually try to keep my blog posts short. Today I have failed in this endeavor but urge you to please read through to the end of this important post. The current issue of Foreign Affairs Magazine features an excerpt from Leslie Gelb's new book, Power Rules: How Common Sense Can Rescue American Foreign Policy.  This essay is exceptionally good, and, in my view, Gelb's thesis should be applied to all forms of statecraft and to promote the resolution of both newly emerging and long stagnating public policy debates.

Gelb accurately diagnoses the "weakening fundamentals of the United States.  First among them is that the country's economy, infrastructure, public schools, and political system have been allowed to deteriorate.  The result has been diminished economic strength, a less vital democracy, and a mediocrity of spirit."

Several paragraphs in this powerful essay deserve highlighting:

"The bases of the United States' international power are the country's economic competitiveness and its political cohesion, and there should be little doubt at this point that both are in decline.  Many acknowledge and lament faltering parts here and there, but they avoid a frontal stare at the deteriorating whole.  It is too depressing to do so, too much for most people to bear. … The United States is now the biggest debtor nation in history, and no nation with a massive debt has ever remained a great power.  Its heavy industry has largely disappeared, having moved to foreign competitors, which has cut deeply into its ability to be independent in times of peril.  Its public-school students trail their peers in other industrialized countries in math and science. They cannot compete in the global economy.  Generations of adult Americans, shockingly, read at a grade-school level and know almost no history, not to mention no geography.  They are simply not being educated to become the guardians of a democracy.

These signals of decline have not inspired politicians to put the national good above partisan interests or problem solving above scoring points.  Republicans act like rabid attack dogs in and out of power and treat facts like trash.  Democrats seem to lack the decisiveness, clarity of vision, and toughness necessary to govern.  This tableau of domestic political stalemate begs for new leadership.  The nation that not so long ago outproduced the rest of the world in arms and consumer goods, the nation lionized and envied for its innovation, can-do spirit, and capacity to accomplish economic miracles, has become overwhelmed by the tasks it once performed competently and with relative ease."

This is the most succinct and gut-wrenching summary of our national predicament that I have read.  Gelb puts his finger directly on the jugular vein of America's innovation ecosystem and diagnoses the multiple layers of dysfunction that have launched our country into such a deep crisis.  I share his fear of a new global reality developing along the following lines:

Images-1"The real danger in this universe of primitivism and plenty is not new wars or explosions among major states, or a world war, or even a nuclear war.  It is the specter of nations drowning in a flood of terrorism, tribal and religious hatred, lawlessness, poverty, disease, environmental calamities, and governmental incompetence.  Many nations are going under because they are simply unable to cope, and they will drag others down with them."

 

Gelb closes this essay with an impassioned plea for action, and most important, he retains a strong sense of hope and pride in our country:

"Every great nation or empire ultimately rots from within.  One can already see the United States, that precious guarantor of liberty and security, beginning to decline in its leadership, institutions, and physical and human infrastructure, heading on the path to becoming just another great power, a nation barely worth fearing or following.  It is time to send up flares signaling that the United States is losing its way and its power, that it is in trouble. But it is even more important to reaffirm the belief that the United States is worth fighting for both across the oceans and at home.  There should be no doubt that the United States, alone among nations, can provide the leadership to solve the problems that will otherwise engulf the world.  And for all the country's faults, there should be no doubt that it remains the last best chance to create equal opportunity, hope, and freedom.  But to restore all that is good and special about the United States, to rescue its power to solve problems, will require something that has not happened in a long time: that pragmatists, realists, and moderates unite and fight for their country."

ImagesI've been sending out flares to other realistic moderate pragmatists on this and other topics that demand a "common sense" approach for years.  Through groups such as the Council on Foreign Relations, the Aspen Institute's Socrates Society, the Working Group on Director Accountability and Board Effectiveness, and, most recently, the Security Innovation Network, I have joined and helped forge communities of interest bound together by empowered individuals who are thoughtful and constructive agents of change.  As Gelb points out, we have a lot of wood to cut, but I remain energized and, most importantly, hopeful that we can make a difference because we have to.  Given where America stands today, fomenting pragmatic and realistic change is not an option, it is a requirement.

  

 

ITSEF Video: How Global Competition Has Changed and the Critical Role of Venture Capital in America’s Growth Economy

Global Competition and the Critical Role of Venture Capital in America’s Growth Economy

[RUN TIME 3 MINUTES 17 SECONDS]
Dr. Curtis Carlson, President and CEO of SRI International, speaking on the panel with Dr. Gururaj “Desh” Deshpande, Chairman Sparta Group, LLC and Lesa Mitchell, VP Advancing Innovation, Kauffman Foundation, at the IT Security Entrepreneurs’ Forum held at Stanford University on March 18, 2009.
Since 2007, ITSEF has focused on advancing innovation in security technologies through public-private partnerships by developing a community of interest between Washington and Silicon Valley. ITSEF is the only conference of its kind designed to “bridge the gap” between the Federal Government, system integrators, venture capitalists, and academic research communities. Dr. Carlson discusses the fragility of the U.S. venture capital ecosystem and how the U.S. Government needs to better understand the role of venture capital as the growth engine in the U.S. economy. Dr. Carlson also describes the declining competitive position of the U.S. in research and development today.
ITSEF is a part of the Security Innovation Network (SINet). For more information on SINet, click here.

ITSEF III Video: Curt Carlson, CEO of SRI International, on America’s Challenges Making the Transition to an Innovation Economy

Challenges Created by America’s Transition to an Innovation Economy

[run time 2 minutes 36 seconds]
Dr. Curtis Carlson, President and CEO of SRI International, speaking on a panel at the IT Security Entrepreneurs’ Forum (ITSEF) held at Stanford University on March 18, 2009. Since 2007, ITSEF has focused on advancing innovation in security technologies through public-private partnerships by developing a community of interest between Washington and Silicon Valley. ITSEF is the only conference of its kind designed to “bridge the gap” between the Federal Government, system integrators, venture capitalists, and academic research communities. Carlson explains how the US has transitioned to an Innovation Economy and discusses the broad socio-economic implications of accelerated rates of change in technology.
ITSEF is a part of the Security Innovation Network (SINet). For more information on SINet, click here.

ITSEF III Video: Unintended Consequences of U.S. Regulation– Serious Risks to Venture Capital and Innovation

Unintended Consequences of Regulation Put Fragile VC and Innovation Ecosystems at Grave Risk

[run time 46 seconds]
Dr. Curtis Carlson, President and CEO of SRI International, speaking on a panel with Dr. Gururaj “Desh” Deshpande, Chairman Sparta Group, LLC, and Lesa Mitchell, VP Advancing Innovation, Kauffman Foundation, at the third annual IT Security Entrepreneurs’ Forum (ITSEF) held at Stanford University on March 18, 2009. Since 2007, ITSEF has focused on advancing innovation in security technologies through public-private partnerships by developing a community of interest between Washington and Silicon Valley. ITSEF is the only conference of its kind designed to “bridge the gap” between the Federal Government, system integrators, venture capitalists, and academic research communities. Dr. Carlson addresses the challenges that exist today for the U.S. to build an innovation economy. He credits unintended consequences from financial regulation, in particular Sarbanes Oxley and current U.S. immigration policy for highly skilled foreign nationals, as killers of innovation in the U.S. today.
ITSEF is a part of the Security Innovation Network (SINet). For more information on SINet, click here.