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Wednesday PM Daily | January 24, 2018
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Study: Iowa deficient in venture capital; River Glen Venture pulls plug on fund
By Business Record StaffIowa lacks sufficient pools of private venture funding for technology companies, which is one of three factors that states need to have an innovative economy that fosters robust technology investments, according to a new University of Iowa study.
Coincidentally, a proposed seed capital fund in Central Iowa that was planning to invest in Iowa-based medical technology startup companies has abandoned that effort after being unable to find sufficient numbers of investors, Clay & Milk reported.
River Glen Venture Partners -- a fund first announced in 2016 -- has been abandoned after not being able to raise enough capital, fund founder Matt Busick said.
River Glen was certified by the Iowa Economic Development Authority as an "innovation fund," meaning investors in the fund could receive tax credits based on the amount they invest in Iowa startups. Busick sought to raise $25 million to fund a portfolio of 10 startups.
Busick said because of a lack of institutional investors that make larger investments, he had to focus on individual investors. However, he couldn’t find sufficient numbers of individual investors to make the fund workable.
According to the University of Iowa study, the three most important components of an innovative
state economy are the presence of significant private venture-capital funding, government funding and robust research universities. Those states that are strong in all three see a 16-fold increase in product innovation over states that are weak in all three. By those measures, Iowa scored near the middle of the pack, at 22nd among the states.
"Industry, academia and government are the ingredients of the ‘secret sauce’ that fosters innovation," says Shagun Pant, assistant professor of finance in the Tippie College of Business and co-author of the study. "Firms have an advantage based on the state they’re in."
The study looked at medical device development as a proxy for overall economic innovation. Researchers studied how firms responded to Medicare approval of new devices, a "positive shock" that sets off a wave of research and development by companies to design, manufacture and market a product that will be
paid for by the government for millions of Medicare recipients.
Pant’s research found that venture capital was the most important of the three segments, followed by research universities and government funding third. The study found that the five most innovative states for medical devices were California, New York, Massachusetts, Illinois and Texas.
A proposed innovation center at UI would be a step toward creating a more innovative culture throughout the state, Pant said, by attracting people with capital and ideas who are willing to take risks.
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Oppenhuizen promoted at Partnership
Greater Des Moines Partnership communications manager Kyle Oppenhuizen has been promoted to communications director. Oppenhuizen will help lead work on the timing and sequencing of news releases, and will guide key messaging with Chief Strategy Officer
Tiffany Tauscheck. He also will play a key role on the content calendar and themes, talking points, and speech writing. He will review external communications, oversee newsletter content and produce communications for board members and investors. Oppenhuizen is a former writer for the Business Record.
EDF: Wind and solar jobs outnumber coal and gas
The national nonprofit Environmental Defense Fund reports that the number of jobs in the wind and solar power industries outnumber those in the coal and gas businesses in 30 states, North American Windpower reports. One of the leaders, Iowa, should have 15,000 jobs in wind by 2020, according to the report.
Human rights commission plans symposium
The Des Moines Civil & Human Rights Commission plans a symposium, "The Blueprint to Building Community," from 8 a.m. to 5:30 p.m. March 14 at Des Moines University’s Student Education Center. "We believe that the blueprint to building community is eliminating systemic racism, being truly inclusive to all, alleviating poverty, improving
economic conditions for everyone, having just laws, getting to know your neighbor, and developing empathy," stated Joshua Barr, director of the Des Moines Civil & Human Rights Commission. The symposium will include six tracks and a panel of government leaders. Registration is available online.
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MEMBERSHIP EXCLUSIVE CONTENT
In case you missed it ...
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A brief look back at news from the past week.
Index falls
Iowa’s Rural Mainstreet Index falls amid continued low commodity prices and concerns that NAFTA will be scrapped. Read more
Coalition eyes drug costs
A coalition of health advocacy groups hopes to address high out-of-pocket prescription drug costs in Iowa. Read more
JLL growing
Brokerage JLL is expanding its territory and its staff. Read more
Northey in limbo
Reports say a political battle between ethanol and oil interests are still holding up the nomination of Iowa Agriculture Secretary Bill Northey for a job at USDA. Read more
New Mercy leader
Mercy Medical Center-Des Moines begins a new chapter with the arrival of Karl Keeler. Read more
MORE INSIDER CONTENT: See all Business Record Insider content and become an Insider.
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NEWS BRIEFS
GE is under SEC investigation
CNN Money: General Electric is under investigation by the Securities and Exchange Commission. GE said today that regulators are investigating a $6.2 billion insurance loss that the company revealed last week. The disclosure is a new and potentially much more serious problem for a company already reeling from missteps and questionable management decisions. The SEC is also investigating the company's accounting, GE said.
Apple's iOS 11.3 update gives you control over iPhone slowdown
CNN Tech: Tim Cook is making good on a promise to let users opt out of Apple slowing down their iPhones. Apple gave a sneak peek today of iOS 11.3 months before its spring launch. Although the company does not generally preview minor software updates this far in advance, the move is likely a damage control effort to make it clear that two important features are on the way: the ability to opt out of Apple slowing down your phone and a tool that shows your iPhone battery's health.
Starbucks to boost pay, benefits after U.S. lowers corporate taxes
Reuters: Starbucks Corp. will use some of the savings from the new U.S. corporate tax cuts to give domestic employees pay raises, company stock and expanded benefits with a combined worth of more than $250 million, the company said today.
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ONE GOOD READ
The internet is enabling a new kind of poorly paid hellTHE ATLANTIC: Technology has helped rid
the American economy of many of the routine, physical, low-paid jobs that characterized the workplace of the last century. Gone are the women who sewed garments for pennies, the men who dug canals by hand, the children who sorted through coal. Today, more and more jobs are done at a computer, designing new products or analyzing data or writing code. But technology is also enabling a new type of terrible work, in which Americans complete mind-numbing tasks for hours on end, sometimes earning just pennies per job. And for many workers living in parts of the country where other jobs have disappeared -- obviated by technology or outsourcing -- this work is all that’s available for people with their qualifications. Read more
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KCCI TOP STORIES
Fire marshal: Apartment building destroyed in three-alarm fire had no sprinklers
Residents of the Olde English Village apartments in West Des Moines waited to assess damage to their homes Tuesday following a three-alarm fire at the apartment. The blaze broke out Monday afternoon in one of the buildings at 1201 Office Park Road. Fire crews continued to monitor hot spots Tuesday, but investigators were able to enter the building's remains for the first time to start searching for a cause. Read more
Not just for humans: Dog flu cases on the rise
At least 13 states have reported outbreaks of the dog flu this season. Employees at Avondale Pet Hospital in Des Moines say they have not reported canine flu cases yet in 2018, but they anticipate a high number of cases in coming months. Mandy Hollander, an associate veterinarian at Avondale, said canine flu is highly contagious. Though there is no evidence people can catch canine influenza, they can pass it along to their dogs. Hollander said dogs that spend a lot of time with other dogs at doggy
day cares or in boarding situations are at a higher risk of catching the flu. Read more
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Tonight:
Mainly clear. Low 28. Winds SSE at 5 to 10 mph.
Thursday:
A mainly sunny sky. High around 50. Winds S at 10 to 15 mph.
Get the latest KCCI weather.
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BUSINESS RECORD IOWA INDEXThe Iowa Index is an unweighted average of all 22 Iowa-based public companies. Below is a live look at those 22, plus 15 additional companies with large operations in Iowa.
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