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Optimism reigns at Phila.'s venture conference

A survey of more than 250 attendees finds many raising capital and planning for growth and acquisitions in 2011.

Optimism reigns at Phila.'s venture conference

No signs of an enthusiasm gap at last week’s Impact 2010 venture-capital conference in Philadelphia.

A survey of more than 250 entrepreneurs, investors, and professional advisers conducted Nov. 10 by KPMG L.L.P. found plenty of optimism among the people who start, feed, and guide growing companies.

The power of positive thinking would seem to be an essential ingredient in any risky effort, but it was been largely absent among the attendees of the 2008 and 2009 venture conferences in Philadelphia.

KPMG said 35 percent of those surveyed indicated they were raising additional capital, while 33 percent said they were hiring and planning for growth and acquisitions. The accounting firm added those figures together to produce a “pro-growth” total of 68 percent.

The same question last year produced a pro-growth total of 53 percent, KPMG said.

But hold on. Didn’t I write last November that attendees were much more optimistic than the previous year? Sure did. That’s what KPMG found then, too.

Unless I missed the Great Recovery of 2010, weren’t those good feelings premature?

Perhaps, but think back to November 2008. The annual venture capital gathering in Philadelphia took place just two months after the collapse of Lehman Bros. and the massive federal bank bailout. Surviving, not thriving, was top of mind.

Compared with the economic landslide of 2008, the slippery sand dunes of 2009 probably felt like a solid foundation for growth. While unemployment remains a big negative in 2010, many other economic measurements have been showing positive trends.

That’s why KPMG’s latest survey has about 60 percent of the respondents predicting revenue will rise more than 10 percent in 2011. Revenue growth? What’s that?

Brian Hughes, partner and co-leader of KPMG’s venture capital practice, said some factors were aiding the mood. The Standard & Poor’s 500 Index is up 14.5 percent since Aug. 26, the day before it became clearer that the Federal Reserve would launch a new round of quantitative easing.

There is also a growing belief that the Bush-era tax cuts will be extended, Hughes said. Combine that with an overall feeling of stability, and business owners are daring to think about undertaking capital investments in 2011, he said.

Dean E. Miller, president and chief executive officer of the Greater Philadelphia Alliance for Capital and Technologies, which presented the venture conference, also felt the brighter mood this year.

He attributed the improved mind-set to what he called “right-sized business activity.” Cost-cutting is largely done. Companies have been able to make money with their smaller capacities and are itching to pursue growth opportunities to make even more money, he said.

“It’s likely to feed on itself in 2011,” Miller said, although firms probably will continue to hesitate to add jobs.

About 1,000 people attended the day and a half-long conference, which was the first presented by the group formed from the merger earlier this year of the Eastern Technology Council and the MAC Alliance.

Of the 50 young companies that presented their business plans to investors, 32 were from the Philadelphia region. They were largely evenly split from among the information technology, life-sciences and clean technology sectors - a selection that reflects the diversity of the growth companies emerging here, Miller said.

Those companies include:

* Health Advocate Inc., a Plymouth Meeting firm that helps the employed navigate the nation’s health-care system.

* AE Polysilicon Corp., a Fairless Hills company that produces material used in solar-panel manufacturing.

* Recro Pharma Inc., a Malvern specialty pharmaceutical company founded by Gerri Henwood, who’d previously started Auxilium Pharmaceuticals Inc. and Ibah Inc.

Miller, also a managing director at Novitas Capital, a Wayne firm focused on early-stage companies, said there is a lot of pent-up demand in Corporate America that the technology sector is poised to fill. Business can go only so long without investing in technology upgrades, he said.

So 2011 has to be a better year, right?

Nov. elections

Not one or two, but three annual shareholder meetings will be held for area companies this week.

The only one to command popular attention will be Campbell Soup Co., the Camden food processor that on Wednesday scaled back its earnings for fiscal 2011 to rise only 2 percent to 4 percent rather than 5 percent to 7 percent.

Campbell Soup likes to move its shareholder meeting around to different parts of the nation. This year, soup lovers in Florida will get to hear chief executive officer Douglas Conant talk turkey, or chicken noodle, at the gathering at the Heritage Center in Reunion, Fla., on Nov. 18.

Constar International Inc., the plastic-container spin-off from Crown Holdings Inc., will hold its annual meeting at the Cira Centre offices of Dechert L.L.P. on Nov. 16 at 8 a.m.

While the agendas for both of those meetings are typically boring, the lengthy list of company-sponsored proposals on the proxy for Health Benefits Direct Corp. shows change is in the offing for the tiny Radnor company.

Health Benefits Direct, which will host its annual meeting at its offices on Nov. 18 at 9 a.m., wants shareholders to approve an increase in the number of shares of its common stock and preferred stock.

It’s also seeking approval to rename the company to InsPro Technologies Corp.

Rolls right off the tongue.

 

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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