• the SEC hasn’t provided clear regulations about crowdfunding yet, and may take up to 270 days to do so
• they will only be able to spread the word about their startup’s funding goal on accredited websites

Some experts are even already trashing the new law, saying that the bill passed by the government is a big mistake both for entrepreneurs and people who intend to fund the projects via crowdfunding. The main point of experts is that startup funding is made for professional investors, and that the risks will be underestimated by regular people. More arguments are developed by Daniel Isenberg in his HBR post.

And as if that wasn’t enough, there’s more and more questioning about whether we are in a startup bubble or not. Niche markets are not anymore easy to reach, competitiveness growS significantly in every industry, as the cost of cerating a startup is getting lower every year, especially in IT-related domains. In addition, inspiring stories such as Facebook, Groupon or Zipcar tend to attract more and more aspiring entrepreneurs in the arena, as entrepreneurship is more and more defined as a great career path, as opposed to classic career moves. An excellent article of Venture Beat elaborates on the TOPIC here.

It seems to us that we are more in a classic extension & contraction phase of the number of startups popping in the United States. Small Businesses are the basis of economic growth and job creation, so an increase in the number is a good sign. What matters, though, is the ideas. Entrepreneurs have to focus on projects that bring social and human value to their customers and to the world, in addition to economic prosperity. If this is their goal, then there will never be enough startups in the world !

Nevertheless, some of the ingredients are pretty well known. Among the most importants:

• Successful companies, that set examples for aspiring entrepreneurs, foster scientific research and support entrepreneurship
• High level research, thanks to the presence of institutes such as Stanford, Berkeley, and other well-performing research centers
• A dense pool of specialized investors, VCs and angels, perfectly integrated into the local ecosystems, and ready to fund the best projects
• An incredibly talented network of professionals, constantly interacting, exchanging ideas and accelerating the development of new projects. The magnet effect of the region generates a permanent renewal of the workforce, therefore maintaining a great dynamic
• A unique culture of entrepreneurship, and a startup creation rate 3 to 4 times higher than any other region in the world

Although most of these features could theoretically be duplicated in other region, generating an identical sense of entrepreneurial culture seems impossible. Still, some other ecosystems are performing very well, in the U.S (Boston, New York, Research Triangle Park, etc.) as well as in the world (London, Toronto, Paris, Tel Aviv, Berlin, etc), and needless to say, with very different characteristics than the Valley.

A study conducted with 20 000 startups all over the world, by the company Startup Genome, revealed some wide differences between these ecosystems and the SV :

• While SV entrepreneurs tend to focus on new markets of very wide size (several billions), european entrepreneurs, especially in London, favor markets that are more mature, and can be conquered pretty fast, to sell the company in a short amount of time
• SV entrepreneurs focus twice more on online games or social networks than their NYC counterparts, who are ahed on design and fashion
• SV entrepreneurs tend to have a scientific background, whereas in Europe, founders with business as a primary degree dominate

These facts, beyond blunt analysis, reveal that successful ecosystems rely mainly on their own cultural forces, and pass it on the startups. This is the fundamental teaching of the study, that suggests that duplicating the Californian model is a big mistake.

Of course, no one will argue that Facebook’s impact, especially after its IPO, is gigantic. It will create a new generation of Business Angels who will invest a lot in new companies. But could Facebook have had a similar faith anywhere else ? Marck Zuckerberg already confessed that no, especially last time when he came back to Boston, where he invented Facebook.

By choosing to focus on its cutting-edge R&D facilities and a high quality workforce specialized in design and product dévelopment, the Research Triangle Park, in North Carolina, is still the home of IBM, Lexus or Lenovo. A lot of rising startups, such as AirBnB, come to the region to hire developpers, who are as talented than in the valley, cheaper to hire and more available. That’s how the region tries to keep a competitive edge and prevent a talent-drain toward california.

This example can be a source of inspiration for the creation and development of dynamic entrepreneurial ecosystems. The Silicon Valley’s model, as effective as it is today, may not always be the one to admire. The domination of the web these last years engaged some experts to think that the Valley is creating too much economic value but not enough social and human value through most of its startups. Yet, in a decade or less, these two values may be the most important success factors for new companies, and those that will integrate them most will become dominant players.

Will that be in Silicon Valley or somewhere else ? Polls are open !

The original article, in French, can be found here

Dear readers,

Prof. A. Stevens’ point of view is cristal clear about the Technology Transfer (TT) activities in U.S. universities: they are losing momentum because they are not incentivized. At the university level, they will be remaining very costly and unprofitable. Prof. Stevens however strongly believes the U.S. universities have a critical role in generating innovation through university spin-offs or spin-outs. He puts forward the need for more mentoring programs and more commercialization of translational research.

Prof. Ashley Stevens, as jury member of the new French scheme to centralize TT at the regional level (the so-called “SATTs” or TT accelerating corporations), favors the idea to mutualize TT resources through appropriate governmental incentives.

You can read the 3 full article in French : Part 1: http://www.bulletins-electroniques.com/actualites/069/69453.htm

Part 2 : http://www.bulletins-electroniques.com/actualites/069/69519.htm

Part 3: http://www.bulletins-electroniques.com/actualites/069/69585.htm

Yet, a lot of new initiatives, both public and privates, are being developed to help young companies succeed and assist the entrepreneurs in their endeavors. Last week the US Senate passed the Jumpstart Our Business Startups” Act, which enables a series of new measures and regulations to facilitate access to capital for young startups. Among the most important aspects of the bill :

• IPOs regulations have been loosen up a little, raising the limit of shareholders a company can have without becoming public from 500 to 1,000, excluding employees. This will allow the companies to seek new sources of financing without going to public markets too son
• A new category of company has been created, called “The Emerginig Growth” (less than $1B revenue), that will be entitled to bypass some of the IPO regulation imposed by the Sarbane Oxley Act, for the first 5 years following their IPO. This measure is intended to make the IPO process less burdensome for young companies, and so more advantageous.
• The crowdfunding has been officially recognized as a legal way to raise fund and issue shares, opening a new source of financing for companies. Platforms like Kickstart must be thrilled by the decision !

Let’s hope the effects of this bill will be visible soon enough for startups !

On the other hand, can too much support be bad for startups ? As the number of accelerator, incubators and other development program for start ups is growing at a very fast pace (about 150 are actually existing in the U.S, and several are created monthly), could there be a “fashion effect” carrying this phenomenon ? That’s the theory defended by Paul Graham, founder of Y Combinator, one of the two biggest Startup Accelerator program in the country (the other one being Techstars). As these accelerators and programs are popping all over the country, some experts are already evoking the term “bubble” ! Find out about Paul Graham’s opinion in this great article.

That’s all for today folks, and see you next week for great news !

In terms of communication technologies, intellectual property laws, and entrepreneurship, the U.S. are doing very good. But the immigration policies for high-skilled foreigners are still very restricted, decreasing slowly the attraction of this country for those innovation leaders. On this  matter, the American policies have been criticized by this report and many others in the years before. This report also points out that both the U.S. government and the American firms fail to invest a sufficient amount in fundamental and applied research. Most of the investment is spent on development, and the innovations made in fundamental research struggle to become products and services launched into the market.

However, other topics could have been addressed by “The Global Innovative Index” such as cultural and structural differences between countries.

Read The full article in French (Author : Aurore Dupin, intern at the Office for Science and Technology)

As a proof that America’s innovation and entrepreneurship spirit are very much alive, new data released on angel investment in 2011 show that the angels have been very generous,  as they invested between $20B and $22B in early stage startups, a record-high since the 2008 crisis. They also shifted back the money toward seed and early stage startups, their traditional “preys”, which is a good sign for the new entrepreneurs looking for seed investment. Exploring a new model of “collaborative investment”  through “super angel” funds, they increased the median amount they invest in a round of financing by 40%,  up to $700k. If the competition for funding is still particularly fierce among entrepreneurs, the steady health of angel investing is definitely good news, especially as they are spread out around the country, ensuring that not only dynamic hubs as Silicon Valley or Boston receive money.

Speaking of startups, each beginning of year brings us new forecast on which technologies are going to be “hot”, and 2012 is no exception. Paul Graham, founder of the startup accelerator Y-combinator, explains his favorite new technologies in 2012, proposing that we reinvent web search, the way we interact with emails or how to facilitate diagnosis for doctors.

On the big companies side, go read the fantastic series of articles created by Stanford lecturer Nilofer Merchant, who describes how big companies can take advantage of the new social era, and why we shouldn’t rely only on startups to innovate. Full of insights for executives of all industries, these article may change the way you approach social medias and collaboration, even if you haven’t thought about it yet !

That’s all for this week’s good news, next week will certainly bring its share of new ones !

* Trade and Foreign Direct Investment, Science and R&D, Domestic Market Competition and Entrepreneurship, Intellectual Property Right, Digital and Information Communication Technology, Government Procurement and High-Skill Immigration

Organized by the Young Professionals (YP) Committee of the French-American Chamber of Commerce of New  England’s, this informative event will be hosted by Bennet Savitz, one of the best immigration lawyer in Boston.

Moving to the United States is far from being easy process! The FACCNE YP decided to organize this event to make your visa/green card application process less stressful.

And they brought one of the best specialist to help you ! Since 2008 Bennett Savitz has been selected as one of Boston’s Best Lawyers in Immigration Law by Best Lawyers. Trademarked publication described as “the leading referral list in the legal profession.”

He will be providing guidelines and answers to questions related to Non-Immigrant visas, and Immigrant visa: 

The proposed rules require drug development companies to provide studies revealing that the generic copies are “highly similar” to the originals, and prove it using one of several methods described by the FDA.

Before making the guideline definite and permanent the FDA has set a period of 60 days during which it is welcoming feedback and comments from the industry on the following topics:

• Scientific Considerations in Demonstrating Biosimilarity to a Reference Product: this section intends to assist companies by providing them some scientific stepwise approaches that aims to show the similarity between the biosimilars and the reference product.
• Quality Considerations in Demonstrating Biosimilarity to a Reference Protein Product: provides an overview of analytical data to consider when assessing biosimilarity between a proposed therapeutic product and a reference product.
• Biosimilars: Q&A Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009: provides answers to the common questions from manufacturers on developing biosimilar products.

The FDA itself gives leeway for case by case assessments of each proposed biosimilars along their respective development paths. These guidelines will nevertheless support companies in developing new drugs that are in accordance with FDA approval processing, thus helping them saving money. By giving way to companies to make feedback and get involved in the guidelines, the FDA intends to release a framework that is both safe for patients and open enough to let the companies innovate.

The rising of biosimilars is a real challenge for the pharmaceutical industries. The worldwide market for copies of biotech medicines is expected to grow to $3.7 billion by 2015, from just $243 million in 2010! Lots of makers of biotech drugs makers have already anticipated the growth of this market and working to produce rival versions of biotech drugs made by competitors.

The development of biosimilars will not only benefit the industries but also the Federal government. Indeed, The Congressional Budget Office has estimated that the United States could save $25 billion from the use of biosimilars over 10 years.

If these guidelines hardly surprised the key accounts of this sector and are close enough to the guidelines of the European Medicines Agency (EMA), they are generally considered more favourable to this industrial sector that is facing some changes.

Read the full article in French (Author : Lisa Treglia, Deputy Scientific Attachée Consulate General of France in Boston)

As a sign that times are getting harsher for entrepreneurs, the height of the valley kept growing for the past 20 years. While the cash needed to cross this phase was about $500k to $1M in the 90′s, the gap widened to $2 to $10M in 2012, exposing the new companies to higher risks. Even though the needs in capital can vary a lot between industries (biotechs evidently consumes more cash than web development) the trend has been observed for all industries. Why is that phenomenon going on ?

Too much startups or not enough money ?

The answer probably lies in the confrontation of two trends : the lack of financing coupled to the presence of too many startups. Venture capital alost never financed the “valley of death” of startups. Interested in bigger (several millions) and more profitable bets, the VC industry will actually finance companies that are one step further than valley of death, increasing their chances of success.

What about angels and federal grants ? They are the “traditional” opportunities seed and early stage companies turn to at the beginning of their development. If the funds awarded can be sufficient to cross the valley of death in companies that are not really capital extensive, such as web or some IT areas, this is never the case for companies evolving in biotech, medical devices or clean tech industries, that need large amounts of investments right from the start, mainly to cover their R&D expenses.

Latest analysis and articles by experts keep suggesting that not enough funds are available for startups, but one rarely points out the growing number of startups in need of financing these last years. As an example of this, 651 companies were spinned off of U.S universities in 2011, a growth of 10% compared to 2010, while the number of patent applications doubled ! This spectacular jump isn’t matched by a similar increase in investments, that can’t keep the pace ! That’s why some experts want to demystify the valley of death, that would be nothing short of an inevitable phenomenon of shortage of supply facing a growing demand.

The experimented solutions have controversial effects

To solve this problem, the federal government, as well as states, have mostly taken a financial approach, trying to attract more investments in early stage startups by creating tax incentives for investors as well as entrepreneurs.  The results of these incentives are pretty difficult to evaluate and most of all, they don’t solve the problem as they mostly try to shift the existing financing to early stage startup, instead of increasing the overall available amount.

Crowdfunding has been under the spotlight lately too, as a credible alternative for traditional funding and has been presented as very promising for young companies. A bill was even supposed to be adopted by the US congress, but it is actually stuck in the US senate, as some congressmen raised concerns that crowdfunding could give way to multiple frauds.. Also some experts expressed distrust in this new method, arguing that investing in young companies is a job of experts, and should not be allowed to anyone. We will probably have to wait for a couple years for the crowdfunding to mature and sweep the doubts it generates now.

Finally, some companies have been experimenting the lean development method, codified by Eric Ries, a serial entrepreneur living in the Silicon Valley. The idea is to bring a product, even not finished, to the customers and interact as much as possible with them to refine the features and come up with an efficient result, saving money along the way by adopting an iterative development method. If this method is very much used in web or It sectors, where customers can drive powerfull feedback and feel proud to be part of a product’s development, Lean Development is mostly a misfit for industries such as healthcare or cleantech, whose customers expect a fully functional product right from the start.

Do we have to change our approach ?

It seems that none of the previous solutions bear total satisfaction. Except the crowdfunding, none has open a new funnel for sustainable investments in young startups. Duane Roth, CEO of Connect, proposes a radical U-turn in our approach of startup financing. Instead of increasing the amount of available financing, he argues that instead the number of startups should be smaller, especially those created from universities technologies ! His alternative would be the creation of companies specialized in prototype development (PDC), that would be tasked with evaluating the market potential of universities’ technologies and develop proofs of concepts only for those with a great development potential. These proofs of concepts would then be handed to startups that could pretend to be backed by VCs or angels, and would have far better chances of success than original startups, thanks to the preliminary work of PDCs. That’s a radically different approach ! The PDCs still have to be tested to evaluate their impact.

Still, it forces us to reinvent the way we think about company development, financing and innovation. Instead of fixing our old models, shouldn’t we reinvent everything ? The debate is launched !