January is more than a time for personal reflection. As a brand-new Congress gets into gear, businesses and investors are carefully weighing the opportunities and obstacles ahead.

#b#Mark Heessen#/b#, president of the National Venture Capital Association in Arlington, Virginia, assesses what lies ahead for the venture capital industry and for investment in entrepreneurial ventures. One big change, he says, is the slow demise of a long-held idea — that government is responsible for basic research and development for the country as a whole.

As state and national budgets teeter on insolvency, entrepreneurs face a future in which major budget cuts are likely at all levels of government. “Entrepreneurs who have in the past worked with governments and had contracts with the government should have a plan set up so that they can continue to grow,” Heessen says.

Heessen will offer the annual venture industry update at the New Jersey Technology Council’s venture capital and finance peer network breakfast on Friday, January 28, from 7:30 to 9:15 a.m., at the Westin Princeton at Forrestal Village. Cost: $50. Call 856-787-9700 or visit www.njtc.org.

Heesen offers additional reflections on what the next year will bring:

#b#Longer processing times for government funds and approvals#/b#. Two trends could mean longer processing times for government actions of all kinds. First of all, the number of federal employees is likely to go down in response to public demands for a smaller government and balanced budgets. At the same time regulations have increased.

As a result, the smaller number of available grants, loans, and contracts take longer to get into the hands of businesses that need them, Heessen says. We will also see longer time lags for the Securities and Exchange Commission to approve new companies to go public and for the Food and Drug Administration to approve new products in the life sciences sector.

#b#Greater optimism in the venture capital community#/b#. Two trends are causing more optimism today than has existed in the last several years: a record number of acquisitions in 2010 and a growing number of companies that are able to go public. “I believe this will continue into 2011,” says Heessen, “which is a net positive for entrepreneurs who have companies at the point they should go public or be acquired.”

More initial public offerings are also good news for earlier-stage companies. “If venture capitalists can exit late-stage companies, they will have the time and money to invest in new companies,” says Heesen.

#b#Less money invested with venture capitalists#/b#. The fundraising environment has been a little tough for venture capitalists. “By and large, colleges, universities, and pension funds are still feeling the pinch of the downturn and have not been as strongly committed to this asset class as they have been in the past,” says Heessen. “While things are getting a little better, they need to get a lot better.”

Heessen predicts we will see a winnowing of venture capitalist firms. “There will be fewer venture capital firms and fewer venture capitalists at the end of 2011 than there are at the beginning of 2011,” he says.

Yet Heessen sees a potential benefit in this likely decrease in venture capital firms.

“Fewer duplicative companies will be funded,” he says. “Hopefully, venture capitalists will be more choosy in companies they are investing in. Instead of 14 petstore.com companies funded by venture capitalists, there will be three or four.”

Heessen grew up in the Philadelphia area, where his father was a machinist and his mother a physical therapist. He graduated from Duquesne University with a bachelor’s in political science and in 1984 earned a law degree with an emphasis on taxation at the Dickinson School of Law.

Heessen served as an aide to Pennsylvania Governor Dick Thornburg and later he acted as deputy director of federal funds for two Texas governors.

Heessen has been with the National Venture Capital Association for 20 years, first as head of public policy, and for the past 10 years as president.

For New Jersey Heessen foresees continued strong investment in the life sciences arena, although he is concerned about a slower regulatory process increasing the time it takes to get new drugs to market.

Furthermore, he expects the entire information technology space to be stronger in 2011 than in 2010.

More broadly, Heessen offers a mildly positive assessment. “Overall things are much better than they have been,” he says.

“Entrepreneurs and venture capitalists should feel a bit more optimistic about the future of their companies and the industry as a whole.”

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