MENLO PARK, CA. – September 17, 2012

SR Ventures, LLC is announcing today that its client MediStem, Inc. will attend and present at BIOX; Noble Financial Capital Markets’ Life Sciences Exposition to be held at the University of Connecticut, Stamford Campus on September 24-25, 2012.

Following the event, a high-definition video webcast of the MediStem presentation and a copy of the presentation materials will be available on the Company's web site http://www.medisteminc.com, or through the Noble Financial websites: www.noblefcm.com, or www.nobleresearch.com/BioExposition.htm. You will require a Microsoft SilverLight viewer (a free download from the presentation link) to participate.

About SR Ventures, LLC

S.R. Ventures is a multi-dimensional business management advisory and consulting firm.  Our mission is to " package " private and micro cap companies seeking investment from venture capital, private equity, hedge funds, and institutional investors.  

We provide the "blocking and tackling" for venture capital, investment banks and funds to create and package your company in a way that will get you noticed. Giving your company the look and feel that attracts investors to you.

http://www.shorerdventures.com

About Noble Financial

Noble Financial Capital Markets was established in 1984 and is an equity research driven, full-service, investment-banking boutique focused on life sciences, technology and media, emerging growth, companies. The company has offices in New York, Boston, New Jersey, Los Angeles, and Boca Raton, FL. In addition to non-deal road shows and sector-specific conferences throughout the year, Noble Financial hosts its large format annual equity conference in January in South Florida featuring 150 presenting companies from across North America and total attendance of close to 600. For more information: www.noblefcm.com

 
 
Definition of Venture Capital: Venture capitalists invest in startup companies that offer the possibility of profit but with no guarantee the company will make one. They tend to make higher volume investments than do angel investors, and may likely take a larger consulting and management role, as well.

Pros

  • Venture capital firms have deep pockets. The average investment is usually between $500,000 and $5 million.
  • Most venture capital firms offer new startups access to knowledgeable and experienced consultants to help guide your business. Since VCs have a vested interest in your success, they’ll want you to have the best business and management help you can get.
  • They have many deep-pocketed friends who may decide to invest in your company, as well.
Cons

  • Venture capital firms expect a big return on their investment dollar – much bigger than a typical angel investor. Expected rates of return can be as high as 50 percent annually.
  • Venture investors are nothing if not diligent. Hence, they can take six months to a year before deciding to invest in your firm. Business owners who don’t possess the patience of a saint may find that wait excruciatingly frustrating.
  • They’ll ask for equity. Venture firms invest a lot of cash, and they’ll want a lot of control, as well. Often they get that by asking (and getting) a big equity stake in your firm (an angel investor is less likely to ask for that). If you give a VC firm 50 percent or 60 percent of your firm’s equity, you could lose control over your own company.
There is no pure right or wrong way to find financing for your company.

But if you choose either an angel investor or a venture capital firm, at least know what the stakes are going into the deal.

Otherwise, you might get way more than you bargained for.

 
 
Definition of Angel Investing: An angel investor invests in a new business, offering capital for startup or expansion. Angels are not usually among the so-called “1 percent;” many have annual incomes of $200,000 or less. They’re drawn to startups for a higher rate of return than they might get in the stock, bond or real estate market.

Pros

  • Angels are a good fit for many startups – typical investments are between $25,000 and $1.5 million.
  • An angel could be your neighbor. Accessibility isn’t a big issue with angel investors; most cities and larger towns have angel groups or associations. The Wall Street Journal offers a great tutorial on finding angel groups here.
  • Due diligence is usually fast, and the investment also usually comes in the form of a lump sum.
Cons

  • Angel investors expect a high rate of return – often 25 percent or more.
  • Angel investors are usually highly risk-averse, and will rarely make “follow-up” investments.
  • Depending on your “angel,” you might find yourself wrestling with your financier over key company decisions. After all, now that he or she is an investor, your angel feels entitled to some control over your company’s future.
 
 
Early venture capital and the growth of Silicon Valley
A highway exit for Sand Hill Road in Menlo Park, California, where many Bay Area venture capital firms are based
One of the first steps toward a professionally-managed venture capital industry was the passage of the Small Business Investment Act of 1958. The 1958 Act officially allowed the U.S. Small Business Administration (SBA) to license private "Small Business Investment Companies" (SBICs) to help the financing and management of the small entrepreneurial businesses in the United States.

During the 1960s and 1970s, venture capital firms focused their investment activity primarily on starting and expanding companies. More often than not, these companies were exploiting breakthroughs in electronic, medical, or data-processing technology. As a result, venture capital came to be almost synonymous with technology finance. An early West Coast venture capital company was Draper and Johnson Investment Company, formed in 1962 by William Henry Draper III and Franklin P. Johnson, Jr. In 1965, Sutter Hill Ventures acquired the portfolio of Draper and Johnson as a founding action. Bill Draper and Paul Wythes were the founders , and Pitch Johnson formed Asset Management Company at that time.

It is commonly noted that the first venture-backed startup is Fairchild Semiconductor(which produced the first commercially practical integrated circuit), funded in 1959 by what would later become Venrock Associates. Venrock was founded in 1969 by Lawrence S. Rockefeller, the fourth of John D. Rockefeller's six children as a way to allow other Rockefeller children to develop exposure to venture capital investments.

It was also in the 1960s that the common form of private equity fund, still in use today, emerged. Private equity firms organized limited partnerships to hold investments in which the investment professionals served as general partner and the investors, who were passive limited partners, put up the capital. The compensation structure, still in use today, also emerged with limited partners paying an annual management fee of 1.0–2.5% and a carried interest typically representing up to 20% of the profits of the partnership.

The growth of the venture capital industry was fueled by the emergence of the independent investment firms on Sand Hill Road, beginning with Kleiner, Perkins, Caufield & Byers and Sequoia Capital in 1972. Located in Menlo Park, CA, Kleiner Perkins, Sequoia and later venture capital firms would have access to the many semiconductor companies based in the Santa Clara Valley as well as early computer firms using their devices and programming and service companies.

Throughout the 1970s, a group of private equity firms, focused primarily on venture capital investments, would be founded that would become the model for later leveraged buyout and venture capital investment firms. In 1973, with the number of new venture capital firms increasing, leading venture capitalists formed the National Venture Capital Association (NVCA). The NVCA was to serve as the industry trade group for the venture capital industry.  Venture capital firms suffered a temporary downturn in 1974, when the stock market crashed and investors were naturally wary of this new kind of investment fund.

It was not until 1978 that venture capital experienced its first major fundraising year, as the industry raised approximately $750 million. With the passage of the Employee Retirement Income Security Act (ERISA) in 1974, corporate pension funds were prohibited from holding certain risky investments including many investments in privately held companies. In 1978, the US Labor Department relaxed certain of the ERISA restrictions, under the "prudent man rule,"  thus allowing corporate pension funds to invest in the asset class and providing a major source of capital available to venture capitalists.

 
 
A startup or high growth technology companies looking for venture capital typically can expect the following process:

  • Submit Business Plan. The venture fund reviews an entrepreneur’s business plan, and talks to the business if it meets the fund’s investment criteria. Most funds concentrate on an industry, geographic area, and/or stage of development (e.g., Start-up/Seed, Early, Expansion, and Later).

  • Due Diligence. If the venture fund is interested in the prospective investment, it performs due diligence on the small business, including looking in great detail at the company’s management team, market, products and services, operating history, corporate governance documents, and financial statements. This step can include developing a term sheet describing the terms and conditions under which the fund would make an investment.

  • Investment. If at the completion of due diligence the venture fund remains interested, an investment is made in the company in exchange for some of its equity and/or debt. The terms of an investment are usually based on company performance, which help provide benefits to the small business while minimizing risks for the venture fund.

  • Execution with VC Support. Once a venture fund has invested, it becomes actively involved in the company. Venture funds normally do not make their entire investment in a company at once, but in “rounds.” As the company meets previously-agreed milestones, further rounds of financing are made available, with adjustments in price as the company executes its plan.

  • Exit. While venture funds have longer investment horizons than traditional financing sources, they clearly expect to “exit” the company (on average, four to six years after an initial investment), which is generally how they make money. Exits are normally performed via mergers, acquisitions, and IPOs (Initial Public Offerings). In many cases, venture funds will help the company exit through their business networks and experience.

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Equity capital or financing is money raised by a business in exchange for a share of ownership in the company. Ownership is represented by owning shares of stock outright or having the right to convert other financial instruments into stock of that private company. Two key sources of equity capital for new and emerging businesses are angel investors and venture capital firms.

Typically, angel capital and venture capital investors provide capital unsecured by assets to young, private companies with the potential for rapid growth. Such investing covers most industries and is appropriate for businesses through the range of developmental stages. Investing in new or very early companies inherently carries a high degree of risk. But venture capital is long term or “patient capital” that allows companies the time to mature into profitable organizations.

Angel and venture capital is also an active rather than passive form of financing. These investors seek to add value, in addition to capital, to the companies in which they invest in an effort to help them grow and achieve a greater return on the investment. This requires active involvement and almost all venture capitalists will, at a minimum, want a seat on the board of directors.

Although investors are committed to a company for the long haul, that does not mean indefinitely. The primary objective of equity investors is to achieve a superior rate of return through the eventual and timely disposal of investments. A good investor will be considering potential exit strategies from the time the investment is first presented and investigated.

 
 
Angel Investors Business “angels” are high net worth individual investors who seek high returns through private investments in start-up companies. Private investors generally are a diverse and dispersed population who made their wealth through a variety of sources. But the typical business angels are often former entrepreneurs or executives who cashed out and retired early from ventures that they started and grew into successful businesses.

These self-made investors share many common characteristics:

  • They seek companies with high growth potentials, strong management teams, and solid business plans to aid the angels in assessing the company’s value. (Many seed or start ups may not have a fully developed management team, but have identified key positions.)

  • They typically invest in ventures involved in industries or technologies with which they are personally familiar.

  • They often co-invest with trusted friends and business associates. In these situations, there is usually one influential lead investor (“archangel”) those judgment is trusted by the rest of the group of angels.

  • Because of their business experience, many angels invest more than their money. They also seek active involvement in the business, such as consulting and mentoring the entrepreneur. They often take bigger risks or accept lower rewards when they are attracted to the non-financial characteristics of an entrepreneur’s proposal.

 
 
Venture capital for new and emerging businesses typically comes from high net worth individuals (“angel investors”) and venture capital firms. These investors usually provide capital unsecured by assets to young, private companies with the potential for rapid growth. This type of investing inherently carries a high degree of risk. But venture capital is long-term or “patient capital” that allows companies the time to mature into profitable organizations.

Venture capital is also an active rather than passive form of financing. These investors seek to add value, in addition to capital, to the companies in which they invest in an effort to help them grow and achieve a greater return on the investment. This requires active involvement; almost all venture capitalists will, at a minimum, want a seat on the board of directors.

Although investors are committed to a company for the long haul, that does not mean indefinitely. The primary objective of equity investors is to achieve a superior rate of return through the eventual and timely disposal of investments. A good investor will be considering potential exit strategies from the time the investment is first presented and investigated.

 
 
About Venture CapitalVenture capital is a type of equity financing that addresses the funding needs of entrepreneurial companies that for reasons of size, assets, and stage of development cannot seek capital from more traditional sources, such as public markets and banks. Venture capital investments are generally made as cash in exchange for shares and an active role in the invested company.

Venture capital differs from traditional financing sources in that venture capital typically:

  • Focuses on young, high-growth companies;

  • Invests equity capital, rather than debt;

  • Takes higher risks in exchange for potential higher returns;

  • Has a longer investment horizon than traditional financing;

  • Actively monitors portfolio companies via board participation, strategic marketing, governance, and capital structure.

Successful long-term growth for most businesses is dependent upon the availability of equity capital. Lenders generally require some equity cushion or security (collateral) before they will lend to a small business. A lack of equity limits the debt financing available to businesses. Additionally, debt financing requires the ability to service the debt through current interest payments. These funds are then not available to grow the business.

Venture capital provides businesses a financial cushion. However, equity providers have the last call against the company’s assets. In view of this lower priority and the usual lack of a current pay requirement, equity providers require a higher rate of return/return on investment (ROI) than lenders receive.