Monthly Archives: September 2013

StrictlyVC: September 30, 2013

110611_2084620_176987_imageGood morning, readers! Hope you had a great weekend.

Remember, to get in touch with questions, comments, tips or just to chat, feel free to email me anytime at connie@strictlyvc. To sign up for your daily dose of StrictlyVC, click here.

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Top News in the A.M.

Sorry, Coca-Cola. Apple is now the most valuable brand in the world.

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Will Alibaba Draw VCs Back to China?

Although the American financial press seems preoccupied with Twitter’s impending IPO, Alibaba’s IPO could be an even bigger story. The China-based e-commerce juggernaut, which could go public as early as the first quarter of 2014, racked up revenues of $1.38 billion for the quarter ended in March, and analysts estimate that the company could be worth anywhere from $120 billion to $200 billion. (Facebook’s market cap as of this writing is $125 billion.)

As the Alibaba offering approaches, one can’t help wondering why U.S. investors have had so much trouble capitalizing on Chinese tech IPOs.

Although Yahoo remains among one of Alibaba’s biggest shareholders – with a 24 percent stake, half of which it plans to sell at the IPO – Alibaba has few U.S. investors other than GGV Capital, an expansion-stage firm on Sand Hill Road that invested in Alibaba in 2003; and Silver Lake, the private equity firm, which reportedly invested $300 million in Alibaba in 2011. (Japan’s Softbank owns 35 percent of the company; Alibaba’s founders and senior executives own another 13 percent.)

American tech types have tried repeatedly to capitalize on the country, but factors like partner defectionsaccounting scandals committed by China-based companies, and a slowdown in the country’s GDP growth rate have yielded disappointing returns.

Still, success will only come if a firm is willing to stick it out and take the time to forge relationships within China’s close-knit entrepreneurial community, says David Chao, co-founder and general partner of DCM, the early-stage venture firm.

Since 1999, DCM has backed more than 200 companies across the U.S. and China, and three of its most recent IPOs are China-based companies, including  Renren, Dandang, and Vipshop. (DCM owned 20 percent of Vipshop went it went public last year with a market cap of $600 million; today it’s valued at $3.2 billion.)

Last week, DCM scored another China-based investment win when Kanbox, a personal cloud storage service that is often likened to Dropbox, was acquired by Alibaba for an undisclosed amount.

Pointing to a separate, recent deal – the Beijing-based search engine Baidu’s agreement to pay $1.9 billion for China’s popular smartphone app store 91 Wireless – Chao says that it’s actually becoming easier for savvy investors to generate returns. “Five years ago,” he observes, “almost all successful Internet companies were destined to go public. Now that you have a second generation of successful Internet companies going public — large cash companies,” Internet investors can expect exits through M&A, too.

Other shifts Chao has witnessed include an “angel investor boom in the last year that will probably continue for a while,” and less copycat tech and more innovation, particularly when it comes to smartphones and mobile social networks. (Chao characterizes several companies as “way ahead” of anything we’ve seen in the U.S.) “What we’re seeing isn’t a 180-degree shift,” he adds, “but 10 years ago, 99 of 100 business plans were largely focused on being analogous counterparts to successful U.S. or Japanese Internet companies; today, that number is maybe 80 out of 100.”

I ask Chao if it’s too late for firms that still haven’t made a foray into China — as well as whether he thinks U.S. investors have the intestinal fortitude to stick it out. Will Alibaba be the company that refocuses their attention?

“It’s more difficult than it was 10 years ago” to enter the market, Chao notes. But plenty of venture brands are still being established in China, he says. Succeeding in China is all about the long game, he suggests, but “a firm can make its name in very quick order.”

JamBase

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New Fundings

Azimo, a two-year-old, London-based payment processing startup, has raised $1 million in seed funding from eVentures, a global venture fund with offices in San Francisco and Hamburg, Germany among other spots.

Enmetric Systems, a five-year-old, Belmont, Calif.-based company whose software helps companies monitor, control and reduce their energy use and cost, has raised $1.5 million in follow-on financing led by Navitas Capital, with participation from new investors including Azure International, Belgravia Group, and several angel investors. The company  has raised $3.74 million to date.

Love Home Swap, a four-year-old, U.K.-based home swap holiday service, has raised follow-on funding from MMC Ventures of $1.6 million. The company has raised slight more than $4 million altogether, mostly from MMC.

Palantir, the nine-year-old, Palo Alto, Calif.-based data mining startup, has raised $196.5 million in funding, according to an SEC filing that was flagged by VentureBeat Friday afternoon. The funding brings the company’s funding to date to roughly $500 million, and sources tell the San Jose Mercury News that the company expects additional funding in the near future that could push the final round past $200 million. No investors are listed on the Form D, but Palantir’s existing investors include Founders FundGlynn Capital Management, and Ulu Ventures.

PowerbyProxi, a seven-year-old, Pleasanton, Calif.-based that makes chargers and power pads that allow users to power their smartphones wirelessly, has raised $4 million in funding from Samsung Ventures. The funding is part of a $9 million Series C round to which investors TE Connectivity and Movac, an expansion-stage investment firm in New Zealand, also participated earlier this year.

Sharecare, a three-year-old, Atlanta-based health information site launched by WebMD founder Jeff Arnold, has raised an undisclosed amount of funding from the healthcare-focused venture fund Heritage Group of Nashville that brings its total funding to $91 million. Some other Sharecare investors include Galen Partners and TomorrowVentures.

Swiftype, a 20-month-old, San Francisco-based startup that has developed what it claims is a smarter search engine for Websites, has raised a $7.5 million Series A round led by New Enterprise Associates, with individual investors participating. The company has also raised $1.7 million in seed funding to date, from a long line of investors that includes Kleiner Perkins Caufield & ByersCrunchFund, and Andreessen Horowitz.

Twitch, a two-year-old, San Francisco-based video platform for gamers, has raised $20 million in Series C funding led by Thrive Capital, with participation from WestSummit Capital and Take-Two Interactive Software. Previous investors in the company Alsop Louie Partners and Bessemer Venture Partners, also participated. The company has raised $35 million to date.

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New Funds

Revolution Ventures, the venture capital arm of Revolution LLC, run by former AOL CEO Steve Case, has closed a new $200 million venture fund. Case, Tige Savage, and David Golden will lead the new fund, which was raised in just eight months, according to the firm.

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People

Steve Ballmer calls Microsoft “like a fourth child to me in a raw, emotional goodbye to the company, set to the theme song of his “favorite movie of all time,” the 1987 film “Dirty Dancing.”

As Jeff Bezos prepares to take over, Don Graham leaves the Washington Post.

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Exits

Bureau of Trade, a two-year-old, San Francisco-based startup that had created a men’s shopping marketplace, has sold to eBay for an undisclosed, all-cash amount. Investors including Foundation Capital and Founder Collective had provided the company with $1.2 million in seed funding.

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IPOs

Twitter‘s IPO filing — including details of how much Twitter intends to raise and what its shares will cost — will be made public this week, says Quartz.

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Job Listings

CMEA Capital, the San Francisco-based venture firm, is looking to hire a full-time associate to support the partners in its life sciences practice. It’s a “pre-MBA” position and the firm is looking for someone who has already spent a few years within the health group of an investment bank or venture firm or  private equity firm. The ideal candidate will also have a bachelor’s degree in biology, chemistry, or another life science field.

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Essential Reads

Venture capitalist Fred Wilson on the promise of AngelList’s Syndicates program: “It’s hard to be a great lead investor and a completely different thing than being a well sought after angel investor who can get into someone else’s deals.”

Chris Dixon of Andreessen Horowitz weighs in on crowdfunding.

Never mind what you’ve heard in recent years. There’s plenty of money in Europe for solid startups, say European VCs.

Meet Anthony Noto, the Goldman Sachs banker taking Twitter public.

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Detour

More and more college aid is going to kids who less need it.

The U.N. Intergovernmental Panel on Climate Change’s latest report makes it official: If we don’t address climate change in the next 30 years, we’re in for some nasty business.

Atul Gawande on the centerpiece of the Affordable Care Act: It “resembles nothing more sinister than an eBay for insurance.”

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Retail Therapy

Mugs to keep you motivated.

Nine things to do in St. Bart’s.

And: Do you have what it takes to survive for 24 whole hours in the wilderness of Surrey, England with no tent, water or food? (Well, you’d have limited food, and access to local streams and pools, but you’d have to forage for anything else!) Test your endurance at the new Survival Academy from British adventurer Bear Grylls, who has slept in a sheep’s carcass, quenched his thirst with his own urine, and now wants to share his extreme survival techniques with you, outdoor enthusiast. (Cost is $560. If you’d rather spend five days tramping around the Scottish Highlands with little more than a towel and head torch, the price is $3,000.)

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Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking hereIf you’re interested in advertising in our email newsletter, please click here. To sign up for the newsletter, visit strictlyvc.com.

 




Will Alibaba Draw VCs Back to China?

china-sky_1814294bAlthough the American financial press seems preoccupied with Twitter’s impending IPO, Alibaba’s IPO could be an even bigger story. The China-based e-commerce juggernaut, which could go public as early as the first quarter of 2014, racked up revenues of $1.38 billion for the quarter ended in March, and analysts estimate that the company could be worth anywhere from $120 billion to $200 billion. (Facebook’s market cap as of this writing is $125 billion.) 

As the Alibaba offering approaches, one can’t help wondering why U.S. investors have had so much trouble capitalizing on Chinese tech IPOs.

Although Yahoo remains among one of Alibaba’s biggest shareholders – with a 24 percent stake, half of which it plans to sell at the IPO – Alibaba has few U.S. investors other than GGV Capital, an expansion-stage firm on Sand Hill Road that invested in Alibaba in 2003; and Silver Lake, the private equity firm, which reportedly invested $300 million in Alibaba in 2011. (Japan’s Softbank owns 35 percent of the company; Alibaba’s founders and senior executives own another 13 percent.)

American tech types have tried repeatedly to capitalize on the country, but factors like partner defectionsaccounting scandals committed by China-based companies, and a slowdown in the country’s GDP growth rate have yielded disappointing returns.

Still, success will only come if a firm is willing to stick it out and take the time to forge relationships within China’s close-knit entrepreneurial community, says David Chao, co-founder and general partner of DCM, the early-stage venture firm.

Since 1999, DCM has backed more than 200 companies across the U.S. and China, and three of its most recent IPOs are China-based companies, including  Renren, Dandang, and Vipshop. (DCM owned 20 percent of Vipshop went it went public last year with a market cap of $600 million; today it’s valued at $3.2 billion.)

Last week, DCM scored another China-based investment win when Kanbox, a personal cloud storage service that is often likened to Dropbox, was acquired by Alibaba for an undisclosed amount.

Pointing to a separate, recent deal – the Beijing-based search engine Baidu’s agreement to pay $1.9 billion for China’s popular smartphone app store 91 Wireless – Chao says that it’s actually becoming easier for savvy investors to generate returns.

“Five years ago,” he observes, “almost all successful Internet companies were destined to go public. Now that you have a second generation of successful Internet companies going public — large cash companies,” Internet investors can expect exits through M&A, too.

Other shifts Chao has witnessed include an “angel investor boom in the last year that will probably continue for a while,” and less copycat tech and more innovation, particularly when it comes to smartphones and mobile social networks. (Chao characterizes several companies as “way ahead” of anything we’ve seen in the U.S.) “What we’re seeing isn’t a 180-degree shift,” he adds, “but 10 years ago, 99 of 100 business plans were largely focused on being analogous counterparts to successful U.S. or Japanese Internet companies; today, that number is maybe 80 out of 100.”

I ask Chao if it’s too late for firms that still haven’t made a foray into China — as well as whether he thinks U.S. investors have the intestinal fortitude to stick it out. Will Alibaba be the company that refocuses their attention?

“It’s more difficult than it was 10 years ago” to enter the market, Chao notes. But plenty of venture brands are still being established in China, he says. Succeeding in China is all about the long game, he suggests, but “a firm can make its name in very quick order.”

Photo: Courtesy of AFP/Getty

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Attorney Jay Gould on the Pros and Cons of a Public Venture Offering

Jay GouldEarlier this week, I wrote that venture capitalists should take advantage of new general solicitation rules that allow them to advertise when they’re in fundraising mode. I was expecting pushback from skeptical VCs; what I heard from them instead was confusion about how they could advertise without breaking the rules.

For help, I phoned Jay Gould, a partner at Pillsbury Winthrop Shaw Pittman who heads up the law firm’s investment funds practice. Gould — who’s in regular communication with the SEC and says those proposed amendments around the new rules will likely be “substantially” adopted — agreed to discuss the pros and cons for VCs interested in advertising.

According to Gould, one of the biggest downsides of advertising is “potentially” drawing more scrutiny from regulators and investors. (It’s already VCs’ biggest fear, seemingly.)

There’s also just a lot more paperwork. First, a firm will have to file a Form D at least 15 days before beginning its general solicitation for the offering. It will then have to elaborate on whatever advertising methods it plans to use. And it will need to file offering materials, like PPMs, with the SEC before it starts handing them out to investors. Not last, a follow-on form has to be filed once the offering is closed.

The solicitation period can also be a little labor intensive, particularly if it drags on and the firm’s performance changes during that time. The reason, says Gould, is Rule 156 of the Securities Act, which states that funds can’t represent information is any way that’s misleading or causes “material” confusion to investors. That means if an existing investment goes south during the marketing of a new fund, the firm needs to alter its advertising to reflect that change in its overall performance to stay in the good graces of the SEC. (Gould says firms should do this “promptly,” and suggests that even minor changes in performance could necessitate these updates.)

What if a venture firm embarks on a public offering, then decides to shifts gears to raise the rest of a new fund privately? It’s not something Gould recommends. Among other challenges: after a public offering closes, a firm has to wait another six months before launching a private offering. (It’s a rule meant to keep the offerings from becoming integrated.)

So what are the advantages for firms interested in availing themselves of the new rules, I ask Gould. He’s quick to point out that the funds that embrace them can post their performance numbers on their Websites, or go on television and talk about their funds without “getting grilled by compliance people.” Both could be effective in bolstering a firm’s brand and making it faster to raise a fund.

In fact, he says, Pillsbury already has “a couple” of fund clients that intend to pursue general solicitation. And he anticipates many more to come — even if it takes a couple of years for firms to grow comfortable with the prospect.

Most venture firms still “view these new rules somewhat suspiciously,” Gould notes. “But someone will do it right,” he says. “And it will be a really professional, polished effort. And people will go, ‘Holy shit. That’s the new standard. I guess I have to do this now.'”

Photo courtesy of Pillsbury Winthrop Shaw Pittman LLP.




StrictlyVC: September 27, 2013

110611_2084620_176987_thumbnailIt’s Friday, and StrictlyVC is a little tired after a late-night birthday celebration, so please excuse any and all typos. Also: stay tuned for some good stuff coming next week, including  pieces featuring famed investor David Chao and Institutional Venture Partners.

In the meantime, you can always reach me at connie@strictlyvc.com or on Twitter, and you can sign for the newsletter right here. Thanks again for reading and have a terrific weekend!

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Top News in the A.M.

Ford CEO Alan Mulally is now the number one candidate to become Microsoft’s new CEO, reports AllThingsD.

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Attorney Jay Gould on the Pros and Cons of a Public Venture Offering: “Someone Will Do It Right”

Earlier this week, I wrote that venture capitalists should take advantage of new general solicitation rules that allow them to advertise when they’re in fundraising mode. I was expecting pushback from skeptical VCs; what I heard from them instead was confusion about how they could advertise without breaking the rules.

For help, I phoned Jay Gould, a partner at Pillsbury Winthrop Shaw Pittman who heads up the law firm’s investment funds practice. Gould — who’s in regular communication with the SEC and says those proposed amendments around the new rules will likely be “substantially” adopted — agreed to discuss the pros and cons for VCs interested in advertising.

According to Gould, one of the biggest downsides of advertising is “potentially” drawing more scrutiny from regulators and investors. (It’s already VCs’ biggest fear, seemingly.)

There’s also just a lot more paperwork. First, a firm will have to file a Form D at least 15 days before beginning its general solicitation for the offering. It will then have to elaborate on whatever advertising methods it plans to use. And it will need to file offering materials, like PPMs, with the SEC before it starts handing them out to investors. Not last, a follow-on form has to be filed once the offering is closed.

The solicitation period can also be a little labor intensive, particularly if it drags on and the firm’s performance changes during that time. The reason, says Gould, is Rule 156 of the Securities Act, which states that funds can’t represent information is any way that’s misleading or causes “material” confusion to investors. That means if an existing investment goes south during the marketing of a new fund, the firm needs to alter its advertising to reflect that change in its overall performance to stay in the good graces of the SEC. (Gould says firms should do this “promptly,” and suggests that even minor changes in performance could necessitate these updates.)

What if a venture firm embarks on a public offering, then decides to shifts gears to raise the rest of a new fund privately? It’s not something Gould recommends. Among other challenges: after a public offering closes, a firm has to wait another six months before launching a private offering. (It’s a rule meant to keep the offerings from becoming integrated.)

So what are the advantages for firms interested in availing themselves of the new rules, I ask Gould. He’s quick to point out that the funds that embrace them can post their performance numbers on their Websites, or go on television and talk about their funds without “getting grilled by compliance people.” Both could be effective in bolstering a firm’s brand and making it faster to raise a fund.

In fact, he says, Pillsbury already has “a couple” of fund clients that intend to pursue general solicitation. And he anticipates many more to come — even if it takes a couple of years for firms to grow comfortable with the prospect.

Most venture firms still “view these new rules somewhat suspiciously,” Gould notes. “But someone will do it right,” he says. “And it will be a really professional, polished effort. And people will go, ‘Holy shit. That’s the new standard. I guess I have to do this now.'”

money-ears

New Fundings

3D Robotics, a four-year-old, San Diego-based maker of unmanned aerial vehicles, has raised $30 million in series B funding. The company, which was cofounded by former Wired editor Chris Anderson, raised the capital from Foundry GroupSK Ventures, and existing investors True Ventures and O’Reilly AlphaTech Ventures. The company had raised a $5 million Series A round last year.

Antenna Software, a mobile applications developer based in Jersey City, New Jersey, is raising a $3 million round, according to an SEC filing, which states the company has so far raised $2.56 million, including from Investor Growth Capital and Integral Investment Capital.

Avocado Software, an 18-month-old, San Francisco-based company cofounded by Chris Weatherell, an early creator of Google Reader, and Jennifer Bilotta, formerly a senior user experience designer at YouTube, has raised nearly $900,000 in debt, according to an SEC filing. Avocado’s couple-focused app aims to help users “stay connected with the most important person in your life, through chat, lists, calendars, sketches” and more. Last year, the company closed a $1.3 seed round, including from Baseline VenturesLightspeed Ventures, and General Catalyst.

DropThought, a year-old, Santa Clara, Calif.-based company focused on customer engagement analysis and social media marketing services, has raised $2. 5 million in Series A funding, according to an SEC filing. Investors include Xseed Capital.

Good Eggs, a two-year-old San Francisco based company that aggregates, packs and delivers locally grown food to its customers’ doors, has raised an $8.5 million Series A round led by Sequoia Capital and joined by Harrison MetalCollaborative Fund and angel investor Max Ventilla, among others.

Liftopia, an 8-year-old, San Francisco-based company whose online marketplace caters to the ski and mountain activity industries, has raised $5 million in financing led by Industry Ventures. New investors ru-Net, Thayer Ventures, Salesforce CEO Marc Benioff, Zillow CEO Spencer Rascoff, Yelp CEO Jeremy Stoppelman and Walter Winshall also participated, as did existing investors First Round Capital, Lowercase Capital, SK Ventures, Xandex and former Expedia CEO Erik Blachford. The company has now raised $7.9 million to date.

MakeSpace, a months-old startup based in New York City that offers customers on-demand storage (along with on-demand pick and drop off to its storage facilities in New Jersey), has raised $1.3 million in funding from Upfront VenturesLowercase CapitalHigh Peaks Venture Partners and Collaborative Fund

Porch, a two-year-old, Seattle-based company that’s building a data-driven marketplace for home improvement, has raised $8.2 million as part of a planned $27.6 million round, according to an SEC filing. It isn’t immediately clear whether or not the funding includes a $6.25 million seed round that the company disclosed in June of this year, and to which numerous high profile investors contributed, including Ron Conway and former eBay president Jeff Skoll.

RidePal, a two-year-old San Francisco-based company that provides Wi-Fi enabled bus rides for corporate employees, has raised $3.2 million in Series A financing led by Claremont Creek Ventures and Volvo Group Venture Capital. RidePal raised $500,000 in seed capital last year, including from 500 Startups and Amicus Capital.

Singulex, a 10-year-old biotechnology company based in Alameda, Calif., has secured a debt facility of up to $40 million from Oxford Finance and Silicon Valley Bank. The company has raised roughly $78 million in venture capital over numerous rounds and its backers include OrbiMed AdvisorsFisk Ventures, Prolog Ventures, and Jafco Ventures.

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People

Ronny Conway, son of renowned angel investor Ron Conway, is leaving his role as the head of Andressen Horowitz‘s seed-stage investing program and launching his own early-stage tech investment fund. As Dan Primack of Fortune reports, Conway introduced Andreessen Horowitz to the mobile sharing app Instagram. (The firm invested $250,000 and reaped $78 million when the company was later acquired for $1 billion by Facebook  Conway is expected to raise around $30 million for his new effort.

Roger Neal has been named senior VP of corporate strategy at Boston-based Gazelle, a consumer elecronics trade-in site. Neal was most recently executive director of NYC Media Lab and has served in executive roles at BusinessWeek and eBay. Gazelle is a venture-backed company whose investors include Venrock Associates, RockPort Capital PartnersPhysic Ventures and Craton Equity Partners.

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IPOs

King, the British computer games maker behind Candy Crush Saga, has quietly filed documents with the SEC for an IPO that’s expected to value the firm at more than $5 billion.

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Job Listings

Burrill & Company in San Francisco is looking to hire an investment banking associate to work in the life sciences sector for its merchant banking group. Candidates have to have a bachelors degree in a life science-related field of study, or a business-related degree. The ideal candidate also has one to two years of experience in investment banking, private equity or venture capital.

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Essential Reads

What Facebook, Twitter, Tinder, Instagram and Internet porn are doing to America’s teenage girls.

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Detour

As the debate continues in Washington over the funding of President Obama’s health care initiative, sources confirmed Thursday that 39-year-old Daniel Seaver, a man who understands a total of 8 percent of the Affordable Care Act, offered a vehement defense of the legislation to 41-year-old Alex Crawford, who understands 5 percent of it.

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Retail Therapy

We like this simple, refined bike rack for the fixie that deserves to be displayed properly.

Whoa.These black jeans were named after a black covered wagon that dropped off the corpses of 20th century miners in front of their homes. That’s pretty heavy! We probably won’t be buying them (too baggy), but we definitely think the company should win some kind of award for most dramatic backstory.

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Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking hereIf you’re interested in advertising in our email newsletter, please click here. To sign up for the newsletter, visit strictlyvc.com.




StrictlyVC: September 26, 2013

110611_2084620_176987_imageGood morning and happy Thursday, everyone. It’s a busy morning around StrictlyVC headquarters, so just a quick reminder that I’m always available at connie@strictlyvc.com and on Twitter. To sign up for the newsletter, click here!

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Top News in the A.M.

 
Apple’s Jonathan Ive and Craig Federighi: The Complete Interview.
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Series A Investors Take the Gloves Off

In recent years, there’s been a lot of talk about the symbiotic relationship between seed-stage and Series A investors.

But things are becoming a little less symbiotic of late, suggests Josh Felser, co-founder of Freestyle Capital, a San Francisco-based seed-stage firm that recently closed on a second, $40 million fund. Felser says that he has encountered a number of Series A deals recently that “pitted the entrepreneur against the seed investors.”

Here’s the scene that Felser has seen playing out more and more: A VC agrees to invest $5 million into a company with a $20 million pre-money valuation, giving the startup a post-money valuation of $25 million. The company’s seed investors, presumably holding convertible notes, ask to invest an additional $2 million in the Series A round to maintain their pro rata rights. But the VC refuses to go above the $25 million post money, telling the entrepreneur that if he or she wants to make room for those seed investors, the company will have to accept a lower pre-money valuation.

It isn’t a new tactic. It’s always been the case that some VCs don’t play nice with seed-stage investors. In certain situations, too, there are simply too many seed-stage investors to accommodate; if everyone maintains their pro rata rights going into the Series A, it doesn’t give the VC firm enough of an ownership stake to make the investment worth its while.

Still, in recent years, some Series A investors have either left room for seed investors or at least been upfront about their designs to maintain specific ownership levels, thus giving entrepreneurs the opportunity to look elsewhere.

That’s changing, says Felser, who has been involved with two recent investment rounds where VCs have put entrepreneurs and their seed backers in precarious positions by not disclosing their true intentions until very late in the game.

Felser tells me of one startup raising a Series A round that asked Freestyle to invest less than the $750,000 it had planned after the Series A investor laid down some inflexible terms. Felser and Freestyle co-founder Dave Samuel — successful founders themselves — reminded the entrepreneur of how much work they had poured into the startup. (As Felser jokingly tells it, for effect, they refreshed the entrepreneur’s memory over lunch in a darkly lit nightclub that opens out into an alley.)

Ultimately, the founder made room for Freestyle, accepting a lower pre-money valuation in the process. But Felser says the trend is “something [for early investors] to be worried about” and calls relations between seed and Series A investors “symbiotic still, but tense.”

Says Felser, “We depend on each other.” He acknowledges that “fixing the post-money [valuation of a startup] can make a ton of sense,” too. But he doesn’t like that some VCs are starting to play hardball, or that it’s happening “sneakily deep in the process” all of a sudden.

“It’s something we’re mindful of,” he says.

money-ears

New Fundings

Appirio, a seven-year-old, San Francisco-based IT consulting company that offers technology and professional services to companies wanting to adopt public cloud applications, has raised $4 million, according to a new SEC filing. The funding brings Appirio’s total funding to roughly $80 million. Investors include Sequoia CapitalGGV Capital, and General Atlantic.

Deem, a San Francisco-based, e-commerce platform company formerly known as Reardon Commerce, is in the process of raising a new, $100 million round, an SEC filing shows. According to the Form D, the company has already secured $70 million, including from new investors General Catalyst and HGGC, the middle market private equity firm, as well as previous investors Oak Investment Partners and Foundation Capital. Just two years ago, the company had raised $133 million in a financing that reportedly valued the company at $1.35 billion. The newest funding would bring the total raised by the 14-year-old company, whose apps help business and consumers manage online transactions like travel reservations and consumer loyalty programs, to roughly $450 million. Others of its investors include Khosla Ventures, and strategic investors American Express, Citi, and JPMorgan Chase.

Gyft, a two-year old San Francisco-based company that makes a mobile gift card app, has raised $5 million in Series A funding from A-Grade Investments, Social+Capital Partnership and Karlin Ventures. Gyft raised $1.25 million in seed funding a year ago from Google Ventures, Founder Collective and 500 Startups.

HotelQuickly, a Hong Kong-based maker of a hotel booking app, has raised $1.16 million in Series A funding, including from former Singtel and Singapore Airlines chairman Boon Hwee Koh and Temasek Holdings.

JustFab, the three-year-old, El Segundo, Calif.-based e-commerce company, has raised $40 million in Series C financing, led by Shining Capital of Hong Kong, with participation from existing investors Matrix PartnersRho VenturesTechnology Crossover Ventures and Intelligent Beauty. The company has raised $150 to date.

Ranovus, a year-old company based in Ottawa, Ontario, that produces advanced digital and photonics integrated circuit technologies (among other things), has raised $11 million from Azure Capital PartnersOMERS VenturesT-VentureMaRS Investment Accelerator Fund, and BDC Venture Capital.

Shyp, a San Francisco-based company that promises to pick up packages, professionally package them, then send them on their way quickly and cheaply, has raised $250,000 from investors that include the venture firm Homebrew; author-investor Tim Ferriss; Paypal President David Marcus; and Google exec Brian McClendon.

Synergis Education, a two-year-old, Phoenix-based company that’s working with six universities to fund, establish and grow higher education programs for adults, has raised a $33 million Series A round. The funding was led by University Ventures and included Bertelsmann SE and the University of Texas Investment Management Company.

Urban Compass, a two-year-old, New York-based home rentals platform and social network, has raised a $20 million Series A round that values the company at $150 million, according to TechCrunch. New investors include Conde Nast parent company Advance Publications and Salesforce.com founder Marc Benioff. Existing investors to participate in the funding include Founders FundThrive Capital, and .406 Ventures. Urban Compass has raised $28 million to date.

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People

Sarah Guo has joined Greylock Partners from the Goldman Sachs investment banking group, where she led coverage of private enterprise technology companies. Guo worked on the IPO of the HR giant Workday, a company that continues to be co-led by Greylock partner Asheem Chanda. According to Greylock, Guo also championed Goldman’s investment in Dropbox and has advised several public companies, including Netflix and Zynga. Her title is “investor.”

Ellie Wheeler has been promoted to principal at Greycroft Partners, which has offices in both New York and L.A.. Wheeler will continue to be based out of New York, where she works alongside the firm’s managing partner and founder, Alan Patricof, co-founder and partner Ian Sigalow, and partner John Elton.

Marissa Mayer is getting the unauthorized book treatment care of Business Insider’s deputy editor Nicholas Carson, who has just landed a deal with Hachette Book Group. We’re expecting good stuff. (Now the question is: when does the movie version get made, starring Reese Witherspoon?)

Benjamin Nye, co-managing partner of Bain Capital Partners, has just been named CEO of the Boston-based software maker VMTurbo, backed by Bain, Highland Capital Partners and Globespan Capital Partners. Nye will continue in his role at Bain. Meanwhile, VMTurbo founder Shmuel Kliger, a former VP of architecture and applied research at EMC, becomes president of the company.

Anup AroraPaul EdwardsForbes BurttMark Modica, and Daniel Holman have joined Hercules Technology Growth Capital in Palo Alto, Calif., as managing directors. Hercules is a specialty finance firm that provides senior loans to venture-backed companies.

——

Exits

Ebay’s PayPal has acquired Chicago-based payments gateway Braintree, in an all-cash deal worth $800 million. The six-year-old company had raised roughly $70, including from Accel Partners, New Enterprise Associates, RRE Ventures and Greycroft Partners.

Automattic, the San Francisco-based parent company of WordPress, has acquired Cloudup, a seed-funded file-sharing service that launched this year and  Terms of the acquisition were not disclosed. The purchase represents Automattic’s 12th acquisition. Cloudup’s backers include Bessemer Venture PartnersCharles River VenturesRRE Ventures, and Atlas Venture.

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IPOs

Enzymotec, an Israel-based company that produces lipid-based food supplements is expected to raise $75 million tomorrow in a public offering, with its shares priced at between $16 and $18. The company is owned by GlenRock IsraelMillennium Material Technologies FundKibbutz Maanit’s Galam Ltd.Ofer Hi-Tech Ltd., and Mexico’s Arancia Industrial SA de CV.

RingCentral, a San Mateo, Calif.-based company that makes multi-location, multi-user, enterprise-grade communications software, is also expected to go public tomorrow, with its shares offered at between $11 and $13 to garner around $90 million. The company has raised roughly $55 million from Sequoia CapitalKhosla VenturesDAG VenturesScale Venture PartnersSilicon Valley Bank and Cisco.

Violin Memory, a Mountain View, Calif.-based flash storage company, is expected to begin trading tomorrow at between $8 and $10 per share, which would raise about $160 million. The company’s investors include Highland Capital PartnersSAP VenturesToshiba and Juniper Networks.

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Essential Reads

Who gets richest when Twitter goes public? Ev Williams. Not enough-to-buy-an-America’s-Cup-team rich, but pretty rich. Bloomberg has the story.

Reuters columnist Felix Salmon does not approve of SecondMarket‘s new bitcoin fund, warning investors to steer clear.

Bill Gates finally admits that Control-Alt-Delete was a mistake.

———-

Detour

The former president of Trader Joe’s is opening up a restaurant for expired food.

A reporter documents her campaign to make 300 sandwiches for her boyfriend, after which he has promised to propose to her. Someone, please bring us a tissue as we follow this sweet, empowering love story.

———

Retail Therapy

Four words: This thing shoots marshmallows.

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Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking hereIf you’re interested in advertising in our email newsletter, please click here. To sign up for the newsletter, visit strictlyvc.com.




Series A Investors Take the Gloves Off

bio-joshfelserIn recent years, there’s been a lot of talk about the symbiotic relationship between seed-stage and Series A investors.

But things are becoming a little less symbiotic of late, suggests Josh Felser, co-founder of Freestyle Capital, a San Francisco-based seed-stage firm that recently closed on a second, $40 million fund. Felser says that he has encountered a number of Series A deals recently that “pitted the entrepreneur against the seed investors.”

Here’s the scene that Felser has seen playing out more and more: A VC agrees to invest $5 million into a company with a $20 million pre-money valuation, giving the startup a post-money valuation of $25 million. The company’s seed investors, presumably holding convertible notes, ask to invest an additional $2 million in the Series A round to maintain their pro rata rights. But the VC refuses to go above the $25 million post money, telling the entrepreneur that if he or she wants to make room for those seed investors, the company will have to accept a lower pre-money valuation.

It isn’t a new tactic. It’s always been the case that some VCs don’t play nice with seed-stage investors. In certain situations, too, there are simply too many seed-stage investors to accommodate; if everyone maintains their pro rata rights going into the Series A, it doesn’t give the VC firm enough of an ownership stake to make the investment worth its while.

Still, in recent years, some Series A investors have either left room for seed investors or at least been upfront about their designs to maintain specific ownership levels, thus giving entrepreneurs the opportunity to look elsewhere.

That’s changing, says Felser, who has been involved with two recent investment rounds where VCs have put entrepreneurs and their seed backers in precarious positions by not disclosing their true intentions until very late in the game.

Felser tells me of one startup raising a Series A round that asked Freestyle to invest less than the $750,000 it had planned after the Series A investor laid down some inflexible terms. Felser and Freestyle co-founder Dave Samuel — successful founders themselves — reminded the entrepreneur of how much work they had poured into the startup. (As Felser jokingly tells it, for effect, they refreshed the entrepreneur’s memory over lunch in a darkly lit nightclub that opens out into an alley.)

Ultimately, the founder made room for Freestyle, accepting a lower pre-money valuation in the process. But Felser says the trend is “something [for early investors] to be worried about” and calls relations between seed and Series A investors “symbiotic still, but tense.”

Says Felser, “We depend on each other.” He acknowledges that “fixing the post-money [valuation of a startup] can make a ton of sense,” too. But he doesn’t like that some VCs are starting to play hardball, or that it’s happening “sneakily deep in the process” all of a sudden.

“It’s something we’re mindful of,” he says.

Photo courtesy of Freestyle Capital.

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StrictlyVC: September 25, 2013

110611_2084620_176987_imageGood morning! Big day today here in SF, with the America Cup’s race scheduled to start at 1:15 pm PST. We’re hoping for a big win by Oracle Team USA. (We suggest steering clear of Larry Ellison until the race ends to be on the safe side.)

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Top News in the A.M. 

Amazon has introduced three new Kindle Fire models. CEO Jeff Bezos explains the company’s thinking behind them.

Chinese Internet company Alibaba is reportedly moving its IPO to the U.S.; the listing could be valued at up to $15 billion.

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Don Dodge on Indoor Marketing: VCs Missing a “Huge” Opportunity

Don Dodge — a Google Ventures advisor who helps developers build new applications on Google platforms and technologies – says VCs are still outsiders when it comes to indoor mobile location services. He compares the moment to the earliest days of maps and GPS, which are now integrated into just about every application on the Web, but that few investors knew what to do with initially.

We talked about what’s happening last week.

You’re very focused on indoor marketing. Why?

At a very high level, we spend 90 percent of our time indoors, and indoors is where commerce happens.

What’s among the most interesting things you’re seeing?

There are a bunch of companies that can create [digital] floor plans of stores like Toys”R”Us, Office Depot and Walgreens. Stores then give them SKU [stock keeping unit] maps that tell them where products are located on the shelves for inventory purposes, then [the apps] use indoor location technology to recognize where a customer is standing. It isn’t too far of a leap to imagine that as you’re looking at the Gucci bags at a department store, you receive a coupon from Coach.

What strikes you as promising beyond retail applications?

Think about mobile games that could take of advantage of location, like Risk or Monopoly or Capture the Flag, and how they might incorporate the store or the university dorm room that you’re standing in.

There are social aspects, too. Say you’re at a concert and know that five friends are there amid 50,000 other people. Indoor location technologies can tell you exactly where those five friends are. And there are probably 400 more examples of market applications that no one has thought about yet.

There are numerous technical approaches to all of these things, right?

One is Wi-Fi, where you phone accepts signals and triangulates where you are. WifiSLAM, an indoor GPS company that Apple recently acquired, was one example, but there are about 15 other companies that are doing things with Wi-Fi triangulation.

Another area is Bluetooth beacons. Every smartphone has Bluetooth to connect to other devices. Well, the same Bluetooth channel can be used to bounce off known locations to determine where you are.

Other companies are using sound waves, while others still, like Bytelight, are using LED lights in the ceiling. They pulse at a rate of a hundred times a second, which is faster than the human eye can see, but the front-facing camera of a phone can pick up the pulse and know by which light you’re standing.

Apple reportedly paid $20 million for WiFiSLAM. A number of other companies, including CiscoRuckus Wireless, and Aruba Networks, have acquired indoor technologies for undisclosed amounts. Is there going to be a big breakout story here?

It won’t be like social, where there are one or two leaders and everyone else is an also-ran. Instead, there will be hundreds of winners because there are so many different market applications and vertical applications.

And you think VCs are missing all the action. Why?

There have been at least three major acquisitions over the past four months, so now they’re saying, “Hey, there’s something going here.” But by and large, it’s a new, emerging area, with probably 50 small, unknown startups with angel investment or a little VC money that [other] VCs aren’t paying attention to.

When you see more stories about companies being acquired by big companies, then there will be a land grab.

(Readers, for more on indoor marketing, you might want to check out this October 8 summit in San Francisco.)

money-ears

New Fundings

BioDigital, a year-old, New York-based imaging startup focused on 3D visualization of the human body, has raised $4 million led by FirstMark Capital. Much more on the funding can be found here.

BlueData Software, a Mountain View, Calif.-based startup founded last year by two VMWare executives, has raised $15 million in Series B financing led by Ignition Partners. Previous investors Atlantic Bridge VenturesIntel CapitalAmplify Partners and Data Collective also participated in the round, which brings the company’s total funding to $19 million. The company’s first product is being privately tested, and no details have been released yet.

Moxtra, a Cupertino, Calif.-based company that launched earlier this year, has closed on $10 million in Series A funding from investors that include CiscoKDDI of Japan, China’s Innovation Works, and Starwood Capital‘s Barry Sternlicht. Moxtra. Founded by numerous former WebEx employees, Moxtra’s cloud-based collaboration app allows users to interact across multiple devices.

NGDATA, a Gent, Belgium-based company that sells its customer intelligence management software to enterprises to better drive sales, has raised $3.3 million in funding led by Capricorn Venture PartnersSniper Investments and several unnamed angel investors also participated in the round, which brings the company’s total funding to date to $5.8 million.

PatientSafe Solutions, a San Diego-based company focused on patient-safety-related clinical workflow applications, has raised $27 million in Series C funding led by Merck Global Health Innovation Fund. Previous investors Camden Partners, TPG Biotech, Psilos Group and EDBI, the investment unit of theSingapore Economic Development Board, also participated.

Prosper, the San Francisco-based people-to-people lending marketplace, has raised $25 million, according to a new SEC filing. The Form D list several directors, including Rajeev Date, who once served as Deputy Director of the United States Consumer Financial Protection Bureau. Stephan Vermut, a former Wells Fargo executive who became president of Prosper in July of this year, and Chris Bishko, an investment partner at Omidyar Network, are also included in the filing.

Simplee, a Palo Alto, Calif.-based company that is developing a platform for patient payments, has raised $10 million in Series B funding led by Heritage Group, which was joined by previous investors Greylock Partners Israel and The Social+Capital Partnership. The three-year-old company has raised roughly $18 million to date.

Socure, a year-old, New York-based startup that verifies online identities through “social biometrics,” has raised $600,000 in seed funding via debt and convertible notes, according to an SEC filing.

VIPorbit Software, a Dallas-based contact manager for the Apple desktop and device market, has raised $1 million, led by cofounder Max Pucher and Harry Jacobson, a managing partner at TriStar Technology Partners and included nine of the company’s angel investors. The funding brings total financing to date for the three-year-old company to $3.5 million.

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People

Michael Moritz, the billionaire chairman of Sequoia Capital, has told Forbes that he and his wife, Harriet Heyman, plan to give away their entire fortune during their lifetimes. “We don’t intend to expire with any money in our pocket,” he said. Moritz was speaking to Forbes about $30 million that the couple has just donated to the University of California, San Francisco, to fund an endowment for basic science PhD students. According to Forbes, it’s the largest endowed program for PhD students in the history of the University of California.

Adrian Fenty, who rose to national prominence as the mayor Washington D.C. between 2007 and 2011, has joined the Palo Alto, Calif., office of law firm Perkins Coie, where he’ll focus on expanding the firm’s emerging company and venture capital practice. Fenty also continues to serve on the boards of two nonprofits and as a special advisor with Andreessen Horowitz, which brought Fenty into the fold one year ago.

—————-

Exits

5by, a year-old Montreal-based video startup, has been acquired by StumbleUpon of San Francisco. Terms of the deal were not disclosed, but the acquisition is the first for StumbleUpon, a popular discovery service for online content.

——————-

IPOs

Thirteen tech companies are planning to go public this week. Among them:

Applied Optoelectronics, a Houston-area fiber-optic networking products company, is expected to begin trading publicly tomorrow, with its shares being offered at between $13 and $15. Among those investors planning to sell some of their holdings in the offering — expected to raise $50 million for the company — are Grand River Capital Investment Company, Sycamore Management, and Harbinger III Venture Capital Corp.Corporation. More here.

Covisint, a Detroit-based cloud engagement platform that is being spun out of Compuware is also expected to begun trading publicly tomorrow. Its shares are being offered at between $9 and $11, with the company planning to raise $64 million from the offering.

—————

Job Listings

Merger Partners, a Dallas-based firm that scouts for possible acquisitions for private equity groups and operating companies, is looking for an associate in San Francisco. The role entails everything from cold-calling management teams and business owners to helping deals move toward successful closings. To land it, you’ll need at least three years of experience in either business development and/or sales, PE, corporate finance, commercial lending, investment banking, or venture capital.

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Essential Reads

If your kids live in California and are under 18, Governor Jerry Brown has given them one last shot at permanently deleting any Facebook, Twitter or Tumblr posts that could otherwise haunt them as college students and beyond.

Could shared “micro apartments” represent the next wave of the sharing economy?

Nest Labs, the well-funded, three-year-old maker of a smart thermostat, is working on another way into users’ homes: it’s making smoke detectors.

Drama in Helsinki, as Nokia begs its former CEO to accept less than the $25 million bonus promised to him (and he says fat chance).

————–

Detour

A therapist shines a light on a little-known problem: brainy, mentally gifted, single-minded boys who are being falsely diagnosed with autism spectrum disorder.

—————-

Retail Therapy

This deep-pocketed Jaktogo jacket enables you to wear all your possessions, including electronic devices. The good news: the jacket could mean fewer baggage fees at the airport. The bad news: the jacket could land you in small, windowless room with TSA officials all day.

GQ says that “animal prints” are legitimately “in” right now. GQ is often a reliable source for information regarding men’s fashion. This time, do not listen to GQ.

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Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking hereIf you’re interested in advertising in our email newsletter, please click here. To sign up for the newsletter, visit strictlyvc.com.

 

 




Don Dodge on Indoor Marketing: VCs Missing a “Huge” Opportunity

DodgeDon Dodge – a Google Ventures advisor who helps developers build new applications on Google platforms and technologies – says VCs are still outsiders when it comes to indoor mobile location services. He likens the moment to the earliest days of maps and GPS, which are now integrated into just about every application on the Web, but that few investors knew what to do with initially.

Here’s an excerpt from a conversation we had last week:

You’re very focused on indoor marketing. Why?

At a very high level, we spend 90 percent of our time indoors, and indoors is where commerce happens.

What’s one of the most interesting things you’re seeing?

There are a bunch of companies that can create [digital] floor plans of stores like Toys”R”Us, Office Depot and Walgreens. Stores then give them SKU [stock keeping unit] maps that tell them where products are located on the shelves for inventory purposes and so forth, then [the apps] use indoor location technology to recognize in what aisle a consumer is standing, and by what products. It isn’t too far of a leap to imagine that as you’re looking at the Gucci bags at a department store, you receive a coupon from Coach.

What strikes you promising beyond retail applications?

Think about mobile games that could take of advantage of location, like Risk or Monopoly or Capture the Flag, and how they might incorporate the store that you’re in or the university dorm that you’re in.

There are social aspects, too. Say you’re at a concert and know that five friends are there amid 50,000 other people. Indoor location technologies can tell you exactly where those five friends are. And there are probably 400 more examples of market applications that no one has thought about yet.

There are numerous technical approaches to all of these things. How different are they?

One is Wi-Fi, where you phone accepts signals and triangulates where you are. WifiSLAM, an indoor GPS company that Apple recently acquired, was one example, but there are about 15 other companies that are doing things with Wi-Fi triangulation.

Another area is Bluetooth beacons. Every smartphone has Bluetooth to connect to other devices. Well, the same Bluetooth channel can be used to bounce off known locations to determine where you are.

Other companies are using sound waves, while others still, like Bytelight, are using LED lights in the ceiling. They pulse at a rate of a hundred times a second, which is faster than the human eye can see, but the front-facing camera of a phone can pick up the pulse and know by which light you’re standing.

Apple reportedly paid $20 million for WiFiSLAM. A number of other companies, including CiscoRuckus Wireless, and Aruba Networks, have recently acquired indoor technologies for undisclosed amounts. Is there going to be a big breakout story here?

It won’t be like social, where there are one or two leaders and everyone else is an also-ran. Instead, there will be hundreds of winners because there are so many different market applications and vertical applications.

And you think VCs are missing all the action. Why?

There have been at least three major acquisitions over the past four months, so now they’re saying, “Hey, there’s something going here.” But by and large, it’s a new, emerging area, with probably 50 small, unknown startups with angel investment or a little VC money that [other] VCs aren’t paying attention to.

When you see more stories about companies being acquired by big companies, then there will be a land grab.

Photo courtesy of Google Ventures.

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The Case for Embracing General Solicitation: VC Edition

Young man laughing

Ask VCs whether top venture firms are liable to take advantage of the new general solicitation rules, and the answer is often a barely suppressed laugh.

It’s easy to understand why some might look down their noses at the changes. VCs have been operating like a private club for a long time, and they tend to see their publicity-seeking brethren as trendy and desperate.

But all it takes is a quick skip down memory lane to see how fast some of the most mocked innovations to the VC game have become standard operating procedure for today’s Midas List.

Take secondary investments. As recently as 2004, selling a stake to a secondary buyer was an admission of defeat. But along came SecondMarket followed by a long string of savvy secondary transactions — like those Groupon shares that NEA offloaded to later investors, or Accel’s partial sale of its Facebook stake to Technology Crossover Ventures and Andreessen Horowitz — and suddenly, you were a dummy if you didn’t take some money off the table.

And what about marketing? If you’ve been in the industry for more than a decade, you know that many of the most august firms used to avoid reporters like the plague. Then some prescient venture capitalists like Fred Wilson began to build huge followings, and before you knew it, blogs became de rigueur. Andreessen Horowitz took things to another level when it began aggressively courting press attention in 2009. A lot of the firm’s peers privately complained that the firm was sucking all the air out of Silicon Valley, but today, every top firm has an executive or a team of people focused on communications and content strategy.

The list goes on and on. Seed-stage investing used to be a niche strategy as recently as 2005. Today, there’s a glut of seed-stage investors and seed-funded companies.

Investment documents used to 100 pages long and cost a fortune. Now, many startups use standardized Web templates that they can tweak to their heart’s content.

Successful entrepreneurs were outsiders in VC circles; now many have an easier time raising new venture funds than traditional firms.

Do you see where this is going? Yes, the prospect of advertising may seem outlandish right now, but so did a lot of these other trends.

On the plus side, if advertising can speed up a team’s fundraising process, VCs should have more time to make more money for their partnerships.

And themselves.

Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.




StrictlyVC: September 24, 2013

Good morning, and thanks very much to the many of you who are now subscribed to StrictlyVC! If you like what we’re up to, please let your friends know that they, too, can sign up right here. (It’s just so easy!) In the meantime, if you want to talk, complain or drop me a hot tip, I’m always available at connie@strictlyvc.com and on Twitter.

Top News in the A.M.

Beijing is lifting a ban on Internet access within the Shanghai Free-trade Zone to foreign websites, including Twitter and Facebook.

Twitter has reportedly chosen to list on the NYSE, in an offering that would value the company at roughly $16 billion.

The Case for Embracing General Solicitation: VC Edition

Ask a VC whether top venture firms are liable to take advantage of the new general solicitation rules, and the answer is often a barely suppressed laugh.

It’s easy to understand why some might look down their noses at the changes. VCs have been operating like a private club for a long time, and they tend to see their publicity-seeking brethren as trendy and desperate.

But all it takes is a quick skip down memory lane to see how fast some of the most mocked innovations to the VC game have become standard operating procedure for today’s Midas List.

Take secondary investments. As recently as 2004, selling a stake to a secondary buyer was an admission of defeat. But along came SecondMarket followed by a long string of savvy secondary transactions — like those Groupon shares that NEA offloaded to later investors, or Accel’s partial sale of its Facebook stake to Technology Crossover Ventures and Andreessen Horowitz — and suddenly, you were a dummy if you didn’t take some money off the table.

And what about marketing? If you’ve been in the industry for more than a decade, you know that many of the most august firms used to avoid reporters like the plague. Then some prescient venture capitalists like Fred Wilson began to build huge followings, and before you knew it, blogs became de rigueur. Andreessen Horowitz took things to another level when it began aggressively courting press attention in 2009. A lot of the firm’s peers privately complained that the firm was sucking all the air out of Silicon Valley, but today, every top firm has an executive or a team of people focused on communications and content strategy.

The list goes on and on. Seed-stage investing used to be a niche strategy as recently as 2005. Today, there’s a glut of seed-stage investors and seed-funded companies.

Investment documents used to 100 pages long and cost a fortune. Now, many startups use standardized Web templates that they can tweak to their heart’s content.

Successful entrepreneurs were outsiders in VC circles; now many have an easier time raising new venture funds than traditional firms.

Do you see where this is going? Yes, the prospect of advertising may seem outlandish right now, but so did a lot of these other trends.

On the plus side, if advertising can speed up a team’s fundraising process, VCs should have more time to make more money for their partnerships.

And themselves.

money-ears

New Fundings

UniversityNow, a two-year-old, San Francisco-based company that is parent company to two online universities, has raised $19 million in Series C funding from lead investors Bertelsmann SE & Co. KGaA and First Analysis Corp were the lead investors. Existing investors University Ventures, Novak Biddle Venture Partners, Kapor Capital and Bronze Investments also participated in the round.

SimilarGroup, a Tel Aviv-based company that produces an online Web measurement tool called SimilarWeb, has raised $3.5 million in funding, an extension of its Series B round, led by angel investor Lord David Alliance, who is chairman of the clothing catalog retailer N Brown Group. The company has raised $7 million to date. More here.

SafeShot Technologies, a two-year-old, Menlo Park, Calif.-based company that develops safety syringes, has raised $6 million in funding. The financing is part of a $3 million round that SafeShot raised a year ago. The company hasn’t publicly disclosed who its backers are.

AIQ, a Clifton, N.J.-based publisher of financial advisor directories, has received an undisclosed amount of funding from Stonehenge Growth Equity. Earlier this year, the company raised $5 million Series A round from Penton Media.

Mobincube, a five-year-old, Valencia, Spain-based startup whose software allows users to create apps, has raised 700,000 euros (approximately $946,000) in seed funding led by Inveready. The round also included The Crowd Angel and Bankinter.

RainDance Technologies, a nine-year-old company based in Lexington, Mass., has secured up to $35 million in a structure debt agreement with Capital Royalty Partners. The funding comes on the heels of two sizable equity rounds: a $37 million round in 2011 and a $20 million round that was announced in April of this year. RainDance has created a system a system for performing lab experiments using minuscule amounts of material and has raised more th$100 million in venture capital to date.

MediSafe, a medication-compliance company that participated in Microsoft’s accelerator program last year, has raised $1 million in funding, led by Israeli venture firms TriVentures and Lool Ventures. The company is based in Haifa, Israel and has an office in San Francisco.

PreCision Dermatology, a Cumberland, RI.-based company whose therapies are designed to improve skin care, has raised $67 million in debt from Golub Capital to fuel its acquisition plans. The company has already made one major acquisition, last year buying up the assets of Triax Pharmaceuticals of Cranford, N.J., maker of a popular topic steroid and several acne treatments. The terms of that deal were not disclosed, but investors led by Essex Woodlands, MidCap Financial, and NovaQuest Capital Management had help support the acquisition.

IPOs

Foundation Medicine, a Cambridge, Mass.-based company whose molecular information platform generates genomic information about a person’s individual cancer, is expected to begin trading publicly tomorrow at a range of between $14 and $16 per share. Three-year-old Foundation has raised roughly $100 million, including from Third Rock VenturesGoogle VenturesKleiner Perkins Caufield & ByersBill Gates, Digital Sky Technology founder Yuri Milner, and others. The company is looking to raise around $75 million.

Evoke Pharma, a six-year-old, San Diego-based biotech company that develops drugs to treat gastrointestinal disorders and diseases, is also expected to begin trading publicly tomorrow. The company, which is majority owned by Domain Partners and LVP Life Science Ventures, plans to raise $27 million by offering 2.1 million shares at a price range of $12 to $14.

Motley Fool asks: Could Comixology, the comic book company, be the next “IPO multibagger?” If so, its founders could see a windfall. According to Crunchbase, the six-year-old company has raised just $150,000 in debt.

Fund News

Now that Dell is going private, its corporate venture arm is “revving up,” reports Deborah Gage of the WSJ.

People

Zal Bilimoria has joined Andreessen Horowitz as a new partner focused on identifying, evaluating, and recommending deals to the firm’s GPs, reports PandoDaily. Bilimoria joins Andreessen Horowitz from LinkedIn, where he was a senior product manager. Before joining LinkedIn last summer, he worked as a product manager at Netflix, Google, and Microsoft.

SynapDx, a venture-backed startup in Lexington, Mass., has a new VP of informatics in Mark DePristo, who joins from the Broad Institute of Harvard and MIT. Three-year-old SynapDx develops laboratory diagnostic services for autism and neurodevelopmental disorders and is backed by North Bridge Venture Partners, General Catalyst Partners, Google Ventures, Foundation Medical Partners, LabCorp, The Kraft Group, Casdin Capital and Windham Venture Partners.

Tenex Health, a Lake Forest, Calif.-based startup that’s trying to pioneer minimally invasive therapies for the removal of diseased soft tissue, has a new CEO: Jay Hallinan, who takes the reins on October 21. Hallinan was most recently a senior sales executive at Stryker Neurovascular; he has also held sales roles at 3M, Medtronic, and Boston Scientific. To date, Tenex has raised roughly $17 million from investors.

Exits

Blackberry is selling itself to a consortium led by its biggest shareholder, Fairfax Financial, which already owns 10 percent of the troubled smartphone maker. The deal is valued at roughly $4.7 billion, or $9 per share, a slight premium to where Blackberry’s stock was trading before it was halted, pending the news. You can learn more about questions raised by the deal here.

Job Listings

Silicon Valley Bank is hiring a valuation associate in San Francisco. The role entails what you’d guess it would: conducting research on companies, investment trends, and tech trends. You also need basic finance skills, basic accounting knowledge, and working knowledge of biology, chemistry and the regulatory environment.

Essential Reads

This self-taught programmer’s software is now being used by every single coach in pro basketball.

In a poll taken over the weekend about the looming debt-ceiling crisis and government shutdown, most Americans said that they were “totally excited about the new iPhone 5s.”

Whether you think it’s great or creepy, a memory-erasing technology might not be all that far off, observes Vanity Fair.

Detour

Doug Band was once President Clinton’s “body man.” But as he builds out his own business, he’s becoming a serious thorn in the Clintons’ side, reports the New Republic in a long but fascinating profile.

Retail Therapy

Neat. Create an old-school desk set-up for your iPhone with this cool handset stand.

Everything you’ll be needing for Armageddon, including thermal vision cameras, a rifle scope, a knife and a giant poster of a zombie — so you’ll recognize what’s trying to eat you at the end of days.

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