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A Big Quarter for Venture Capital

November 01, 2007

Fifteen Florida firms landed $127 million in venture capital in the second quarter, according to the latest Pricewaterhouse-Coopers/ National Venture Capital Association MoneyTree report. In the year-earlier period, VCs invested a little more than half of that amount in Florida companies, $69 million. For the first half of this year, Florida firms nabbed $276 million in VC funding, compared with $129 million in the first six months of 2006. The Florida companies that received funding in the second quarter:

» Accu-Break Pharmaceuticals (formerly known as SoLapharm), Plantation, accubreak.com
Received: $5,649,900
Industry: Biotechnology
Description: Develops technologies for pharmaceutical tablets
Investors in Q2: Pequot Capital Management; S.A.C. Capital; undisclosed firm

» Applied Genetic Technologies, Alachua, agtc.com
Received: $12,550,200
Industry: Biotechnology
Description: Develops therapeutics for medical patients
Investors in Q2: InterWest Partners; Intersouth Partners; MedImmune; Skyline Ventures; undisclosed firm

» Authentium, Palm Beach Gardens, authentium.com
Received: $3,600,000
Industry: Software
Description: Develops system encapsulation, file and application defense
Investors in Q2: Safeguard Scientifics; Westbury Partners; undisclosed firms

» Avant Healthcare Professionals, Winter Park, avanthealthcare.com
Received: $1,000,000
Industry: Healthcare Services
Description: Provides nurses and therapists on contract with hospitals
Investors in Q2: LFE Capital

» Avalon Healthcare Holdings, Tampa, avalonhealthcare.net
Received: $3,479,000
Industry: Healthcare Services
Description: Provides health insurance plans to small to midsized businesses
Investors in Q2: Inter-Atlantic Group; undisclosed firm

» Excalibur Electronics Miami, excaliburelectronics.net
Received: N/A
Industry: Media and Entertainment
Description: Manufactures electronic products
Investors in Q2: Palm Beach Capital Partners

» Institute for Corporate Productivity (aka i4cp)
St. Petersburg, i4cp.com
Received: $6,050,000
Industry: Business Products and Services
Description: Operates as a research organization focused on workforce productivity
Investors in Q2: IDG Ventures Boston; Trinity Ventures; undisclosed firm

» Interface21, West Melbourne, interface21.com
Received: $9,700,000
Industry: Software
Description: Provides open source software for mission-critical enterprise applications
Investors in Q2: Benchmark Capital; individuals; undisclosed firm

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CEO Trends Survey Results and Reactions

December 01, 2006

U.S. Economy in 2007

We expect the Florida economy to outgrow the U.S. economy in general. We are very bullish about our prospects for Florida next year and beyond. Tourism is very, very strong here, and transportation, utility and healthcare sectors continue to be strong as well.

I don't think it's any secret that residential construction spending is not at the robust level it was six to 12 months ago, but it's still a good sector to be in. Also, in the professional and business services base, I don't know if you'll see the same kind of growth we've seen in the last couple of years.

However, again, those sectors remain really strong in Florida. I do have a bias for this state. The weather is spectacular, and it will continue forever to be a driver of population growth. A low interest rate and low inflation will contribute to, I think, good solid growth in the economy next year, and that's very good for our company.

Market Expansion

 

As a community planning and design and engineering firm, one of the big drivers for us is where our current client base wants to do business. In the next few years, we will be expanding to the north rather than to the south. The national and regional developers and builder-developers really maximized out their opportunities in the markets that existed in the early 2000s in South and Southwest Florida.

A lot of them moved up to Central Florida in 2002 and 2003, and they began moving to North Florida in the last couple of years. They are moving north because there's less competition; the national and regional developer-builders really haven't been in those marketplaces to any large degree. The constraints on growth have not really caught up with those North Florida communities.

2007 Company Forecast

Like many companies, we have experienced upward pressure on salaries and the associated insurance compensation policies that go with that. But, in our case, the effect has been negligible and hasn't stopped us from reaching our goals. What will have the most impact in the coming year is the dramatic increase in commercial insurance costs.

Going into 2007, the rising cost of insurance is a factor that is going to restrict our growth in Florida, and I don't know if we're going to see any abatement of those costs. We have a global property and casualty insurance policy because we have 7.5 million square feet of commercial office space not only in Florida, but also in Charlotte and Atlanta.

Diversifying and growing outside the state and into new markets where the property and casualty costs are not as high, will help us to buy more in Florida where the cost of insurance is four times as high as other areas.

Property Values

We were at one point in 2005/2006 looking at building our own corporate headquarters, and we had...

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U.S. Budget Deficit Ends Year at Lowest Level Since 2007

January 13, 2006

WASHINGTON—The U.S. budget deficit ended last year at its lowest level since 2007, marking the sixth straight annual drop. But the declines may not last without a pickup in economic growth.

The deficit ended calendar year 2015 at $478 billion, or around 2.6% of gross domestic product, down from a year-earlier level of $488 billion, or 2.8% of GDP, the Treasury Department said Wednesday.

After the financial crisis, the U.S. government in 2009 ran deficits not seen since World War II as revenues fell sharply and stimulus flowed. Deficits began to recede in 2010 as the stimulus faded and revenues stabilized. Congress cut spending further after Republicans took control of the House in 2011.

Government spending started to rise two years ago, but deficits continued falling because of strong receipts to the Treasury, in part from tax increases that took effect in 2013.

Now, these dynamics may be fading. Outlays last year rose 5%, roughly the same pace as the year before. Revenues were up 6%, versus a 10% gain in 2014.

“The tremendous progress over the past six years in reducing red ink appears to have ended,” said Greg Valliere, chief global strategist at Horizon Investments, in a recent note to clients.

Government spending will rise further after last fall’s bipartisan agreements between President Barack Obama and Congress that boost discretionary spending caps through September 2017 and extend a series of tax breaks for businesses and households.

Economists at Goldman Sachs estimate the deficit could rise to $650 billion, or 3.5% of GDP, in the fiscal year ending Sept. 30 and to $575 billion, or 3% of GDP, in fiscal 2017.

The U.S. ran a deficit of $14 billion in December, though after adjusting for certain calendar-related changes in when payments are made and receipts are collected, the government would have run a surplus of around $38 billion, according to a Treasury analysis. The surplus reflected a large, one-time transfer from the Federal Reserve that was part of a highway-spending package Congress approved last month.

Deficits have fallen below levels that many budget analysts expected at the beginning of the decade, in part because borrowing costs have remained low, holding down interest costs on the national debt. The U.S. has added nearly $8 trillion in debt since 2007, and the nation’s debt-to-GDP ratio has doubled to around 73%, based on federal debt held by the public. Last year, debt-service costs for the U.S. government fell to 1.2% of GDP, from 1.7% in 2008.

Critics of larger deficits worry the presidential campaign will further relax fiscal restraints. Republican presidential candidates are pushing tax cuts that even under generous assumptions would add trillions of dollars to deficits over the coming decade, while Democratic candidates are touting costly expansions of college education and public benefits.

Much of the spending growth in recent months has been driven by programs that aren’t appropriated on an annual basis by Congress, such as Medicare and Social Security. Costs for these programs are projected to climb as more baby boomers retire, potentially squeezing discretionary spending.

“When I get asked back home, ‘Why are there the battles that you have about government spending?’ it’s because the slice of the pie that we control on the discretionary side gets smaller and smaller and smaller,” House Budget Committee Chairman Tom Price (R., Ga.) said Wednesday at an event at the Brookings Institution.

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The Economic Impact of Renewable Energy

April 20, 2007

Peterborough, New Hampshire [RenewableEnergyAccess.com] When the Fraser Paper Mill shut down in the northern New Hampshire city of Berlin in 2006, many people wondered how the city would recover.

The mill, which had been in operation for over 100 years, was vital to the economic stability of the community. The mill's closure evaporated hundreds of jobs, tens of thousands of dollars in tax revenue and closed the book on a century of history built around the paper industry. Now, as New Hampshire is poised to pass a renewable portfolio standard (RPS) later this spring, a new chapter of economic progress based on renewable energy is unfolding for the city of Berlin. LaidLaw Energy Group, a New York-based developer of independent renewable power plants, has proposed turning the Fraser Paper Mill into a 50 megawatt (MW) capacity biomass electrical generation facility that will utilize woodchips. Because the mill's infrastructure is well suited for developing a power plant, it will be easier and cheaper for the company to construct the facility. If completed in 2008 as planned, the biomass facility will create approximately 500 indirect and 40 direct jobs in timber-rich Coos County where Berlin is located. While a power plant will require much less labor than the old paper mill, 540 jobs are a welcome addition to the area. "Clearly this project would help the local economy and many of the folks who have relied on the paper industry over the years," said Berlin City Manager Patrick MacQueen. "This project will be great for job creation and actually maintaining the jobs that get built." A University of New Hampshire study released this February titled, "Economic Impact of a New Hampshire Renewable Portfolio Standard," concluded that an adoption of 20 percent renewable energy will create thousands of jobs with wages much higher than the current state average, generate over $1 million in state revenue, and provide a "newfound opportunity for NH residents to start businesses." Former New Hampshire Congressman Charlie Bass, who recently joined Laidlaw Energy Group as Special Advisor to company President and CEO Michael Bartoszek, said that renewable energy projects like the Berlin biomass plant are important for economic growth and stability in the state. "I've always been active in supporting alternative energy sources, so I'm excited to be involved with [the Berlin] project. Developments like this will truly benefit the state of New Hampshire and the rest of our country," Bass said. Additional studies released over the last decade have indicated that a large-scale transition by the U.S. into a clean energy economy would significantly benefit the country by creating hundreds of thousands of domestic jobs, generate tens of billions of dollars in federal and state tax revenues, and help revitalize struggling communities. According to a 2004 meta-analysis from of the Renewable and Appropriate Energy Laboratory (RAEL) at the University of California, Berkeley, which examined 13 studies on the economic benefits of renewable energy, approximately 240,000 jobs could be created and maintained if the country passed a 20 percent by 2020 RPS. If the U.S. relied solely on fossil fuels, the country would only maintain around 75,000 jobs. "We found that you get three to five times the amount of jobs in the renewables area than you do in fossil fuels," said Dan Kammen, director of RAEL and co-author of the meta-analysis. "The finding was not that there's some incredibly intrinsic, wonderful feature about renewables, even though I might think there is. It was that these benefits go to the first victors."

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