Top News in the A.M.
Larry Summers is out as candidate for Fed chair. What now?
Tony Conrad to Founders: VC is “Not as Easy as It Looks”
Tony Conrad doesn’t doubt for a second that the worlds of founders and venture capitalists are “highly symbiotic.” But it’s easier to succeed in both worlds if you’re a venture capitalist first, he says.
Conrad is speaking from his own experience, having worn both hats for the last seven years. Before Conrad cofounded the first of two companies — including the identity startup About.me, where he is CEO — he was a VC. (He’s still a VC, working as a venture partner with True Ventures in San Francisco.)
As he tells me enthusiastically over coffee near About.me’s offices in the city’s startup-studded Mission District, once he became a founder, he became a much better investor. Among other reasons why: “My ability to gain access to some of the highest quality founders was exponentially improved because they saw me as one of them.”
Conrad’s juggling act has also benefitted About.me, which sold to AOL just days after publicly launching in 2010 and was bought back by Conrad and True Ventures earlier this year. Among the biggest perks he enjoys as a CEO with continuing VC ties is sitting on several boards for True, where he’s privy to instructive conversations, including about conversion marketing metrics. Such insights “totally inform everything we do at About.me,” he says.
Given the advantages of straddling both spheres, it’s no wonder that more founders have begun dabbling in venture capital. Andy Dunn, for example, the cofounder and CEO of the venture-backed men’s clothing company Bonobos, also helps run an angel investment firm called Red Swan Ventures.
Still, Conrad suggests that the path from entrepreneur to investor is a bit trickier than the reverse path.
For example, founder-investors tend to be a little too entrepreneur friendly at times. (Conrad notes that when True Ventures makes an initial investment, typically in the range of $1.25 million, it expects 20 percent ownership in exchange. Founders without extensive investing experience often ask for far less equity, even when writing similar-size checks.)
Pointing to individuals like LinkedIn founder Reid Hoffman and Workday co-CEO Aneel Bhusri — both partners at Greylock Partners — Conrad says another big benefit to launching a startup as an experienced investor is not having to learn every last thing on the fly. “We already understand the nuances [around] ownership. I didn’t have to learn how to operate on a board, or [the difference between] participating preferred [shares] versus just a straight-up liquidation preference. I already know that.”
It isn’t that every VC is suited to be a founder, says Conrad. But the opposite is also true. “You’re seeing a lot of founders who say, ‘Oh, I’m going to go do a fund. It’s easy.’ But it’s not easy. How many of them are killing it? It’s not as easy as it looks.”
DataRobot, a Boston-based startup that emerged from the TechStars incubator program this spring, has raised $3.3 million in funding, including from Atlas Venture. The company — which counts Atlas partner Chris Lynch as a director — produces an app for building accurate predictive models.
Mobile Iron, a Mountain View, Calif.-based mobile device management company, has raised $47.5 million in new funding. The round brings Mobile Iron’s total funding to roughly $150 million. Last year, the company raised a $40 million Series E. Investors include Institutional Venture Partners, Foundation Capital, Norwest Venture Partners, Storm Ventures and Sequoia Capital.
Amedica, a Salt Lake City-based maker of spinal and reconstructive implants, has raised $7.5 million as part of a $10 million round, according to an SEC filing. Last year, the company closed on $30 million in financing from investors, including Creation Capital.
Okta, a San Francisco-based identity management service for enterprises, has closed on $27 million from Andreessen Horowitz, Greylock Partners and Khosla Ventures. Sequoia Capital led the round. The company has raised just north of $50 million since its late 2008 founding.
Egalet , a Malvern, PA.-based company that was founded in 1995 and develops drug-delivery platforms that release pain medicine, has raised $10 million in fresh funding from previous backer Index Ventures. The company plans to use the capital to advance of its opioid treatments into late-stage clinical development.
Y-Prime, a Malvern, Pa.- based producer of software and professional services to manage global clinical trials, has raised $5 million from Ballast Point Ventures of St. Petersburg, Fla.
In the Market
Hidden Reflex, a seven-person company based in Washington, D.C., is in the market for roughly a million dollars to fuel the continued development of its free, Chromium-based Epic Privacy Browser , which promises users’ greater privacy by blocking the tracking scripts deployed by online ad networks. (The company still earns revenue through sponsored search results, but the results are based only on the search terms employed and a user’s general geographical location, says CEO Alok Bhardwaj.)
The company has already raised less than a million in seed funding, including from Washington Post. But Bhardwaj tells me the browser, which debuted publicly in late August and has since attracted “a couple hundred thousand users,” would use another round toward developing more privacy services to compliment the browser. Says Bhardwaj of the opportunity, “Everyone wants more privacy. For us, it’s kind of a matter of fighting [user] inertia.”
Bain Capital Ventures, which runs a PE-like model with its associates, has parted ways with four of those associates: Greg Mervine, Joshua Sommerfeld, Mike Griffin; and Josh Bruno. No word on what Sommerfeld, Mervine or Bruno are up to next — they may be up for grabs — but Griffin has landed at role as a business analyst at SevOne, a network performance management software company that raised $150 million from Bain Capital back in January.
SecondMarket‘s longtime chief strategy officer, Jeremy Smith, has left the company. A SecondMarket spokesman told me the company doesn’t comment on specific employees. I was also informed that there are no current plans to replace Smith. Meanwhile, a source close to the company says Smith’s decision to leave was driven by personal reasons. Namely, he wanted to raise his children in the Midwest, where he grew up – not in New York City. (According to his LinkedIn bio, he’s now a director of product development at H&R Block in Missouri.)
New Fund News
Lip Bu Tan, who famously founded Walden International in 1987, is raising a new fund called Walden Riverwood Ventures I-B, L.P., according to a Form D processed on Friday by the SEC. The fund’s target is listed as $250 million. Along with Tan, who as been serving as CEO of Cadence Design Systems since 2009, the filing lists Michael Marks , a founding partner of the Menlo Park, Calif.-based private equity firm Riverwood Capital.
A former NBA star and former NFL player have teamed up to launch their own, tech-focused venture capital fund. Called Justice Mashburn Capital Partners, the firm’s cofounders —Jamal Mashburn, a former forward with the Dallas Mavericks and Miami Heat, and Warren Justice, long an offensive tackle with the Philadelphia Eagles — have already made their first investment, in Detroit-based LevelEleven.
San Francisco-based hedge fund Artis Capital is raising a $7 million special purpose vehicle called Artis Practice Fusion SPV II. VentureBeat reported in July that Practice Fusion — which produces cloud-based electronic medical records software that enables doctors to better manage their patient relationships — has been raising a $60 million, fourth round of funding to help finance its rapid growth. The company has already raised roughly $130 million in funding; Artis participated in its $34 million Series C round last year.
Intel has acquired 10-year-old, venture-backed Indisys for “north of” $26 million. The company had raised just less than $6 million from Inveready Seed Capital SCR SA and Intel Capital.
Bessemer Venture Partners is looking for a full-time analyst to join a two-year program in its New York office. You can learn more here.
When Twitter goes public, cofounder Evan Williams and backer Chris Sacca, Union Square Ventures, and Spark Capital will hold stakes that likely exceed a billion dollars. “For me personally, this is a once-in-a-decade or once-in-a-career kind of investment,” Spark Capital’s Bijan Sabet tells the New York Times.
Vanity Fair takes a deep dive into “Waspy” San Francisco neighborhood Pacific Heights, where it discovers that socialite entrepreneur Trevor Traina is helping stack the neighborhood full of exceptionally wealthy tech entrepreneurs, including Bebo cofounderMichael Birch and Zynga founder Mark Pincus. The old guard is mock horrified by all of them. “They bore the hell out of me,” says San Francisco society doyenne Denise Hale.
A look into the latest at Klout, the company everyone loves to hate (even more so now that it lost its COO last week to Uber).
VC Fred Wilson on the importance of exit interviews.
If you have time, here’s an excellent piece to read about Floyd Mayweather, the “last of boxing’s old-school, carny-barker showmen, the last of the third-person narcissists, the last of the great American prizefighters.” (He also apparently wears his boxers and shoes exactly one time before casting them off.)
Pretentious beer glasses, when you’re a beer snob and not afraid to show it.
“American Psycho” style glasses from Oliver Peoples. You don’t have to be a murderous character to kill in these babies!