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Got a Story Idea? . Events
Association Bisnow
   
May 29, 2008
 
       
 

PLUGGING
YOUR INDUSTRY'S
BRAIN DRAIN


 

One thing keeps National Venture Capital Association prez Mark Heesen up at night: VC brain drain. The idea of venture capital was born in the U.S. 50 years ago, and remained uniquely American until the late 90s, when venture firms began sprouting in India and China. Today, 40% of America’s venture capitalists are foreign born, and improving economies abroad (plus mom’s cooking) mean it’s only a matter of time before many of those investors return home.          

 

So what’s a 480 member advocacy group, made up of 90% of America’s VC firms like Polaris, Sequoia and Kleiner Perkins, to do? We headed out to Rosslyn to hear the answer from Mark, who told us that improving America’s educational system is the key to producing more entrepreneurs, including future venture capital titans. Not surprisingly, he’s promoting that goal the way he knows best: by investing. Three weeks ago, NVCA decided to back NewSchools, a California non-profit, with $10 million drawn from its membership over four years. NewSchools is a kind of VC firm itself, supporting educational entrepreneurs who provide services, like recruiting teachers and principals, for urban public schools nationwide.

 

When Mark, a former deputy director for federal funds reporting in the Texas Legislature, came to NVCA in 1991, the organization had 150 members (a third of the current numbers) and four staffers. Now it has a $5.5 million budget and 12 on staff, three of them devoted to public policy. Mark says the association’s success was boosted by a wave of securities litigation reform in the mid 90s. VC firms reacted by flocking to NVCA, which made major advocacy gains like the 1996 defeat of California’s Prop 211, a law that would have held CEOs personally liable for fraud, shifted the burden of proof to the defendant in a fraud suit and made it easier for individuals to sue for securities fraud regarding retirement savings.       

 

Mark was a major marathoner, running 40 races nationwide including Boston and New York. His best time was 2:39 in Pittsburgh in 1992. (How impressive is that? It’s seven minutes faster than Lance Armstrong’s first marathon.) He also loves to get his read on, finishing one to two books a week. His favorite is John Kennedy O’Toole’s Pulitzer Prize winner, A Confederacy of Dunces. Which, he assures us, does not describe his members.

Please send story tips to Simon Brown: simon@bisnow.com.

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