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Apple has just announced that app store sales topped a whopping $10 billion in 2013. More here.
Nick Hanauer on Why VCs Should Fight for a Higher Minimum Wage
For at least the last six months, Seattle-based venture capitalist Nick Hanauer has been arguing for a higher minimum wage and citing stats that underscore the myriad ways that growing income inequality will bring everyone down.
Hanauer was one of Amazon’s first investors and cofounded the ad tech company aQuantive, which sold to Microsoft for $6.4 billion in 2007. He’s also the chairman of Pacific Coast Feather Company, a privately held family business that produces down pillows and bedding for clients such as Sealy and Eddie Bauer.
Although Hanauer clearly isn’t living paycheck to paycheck, he has turned his sights on raising the minimum wage to $15 and is pointedly criticizing Bay Area venture capitalists for their inaction, noting that if they don’t start doing more to stem the “rising inequality in our society,” they are “idiots.”
“VCs have a huge stake in a thriving middle class,” Hanauer told me over the phone yesterday afternoon. “If workers don’t have enough money, they can’t buy from our companies.” Leading the charge for higher wages is an “easy lift” for technology companies and VCs “because we get none of the pain and all of the benefit. If you’re running or funding a venture-backed company, you aren’t paying anyone a minimum wage. On the other hand, you’re hoping to sell your products to everybody.”
I raise the oft-cited argument that many Bay Area companies are making it easier and cheaper to do things, and I can practically see Hanauer rolling his eyes. “There’s this Valley-based libertarian idea that as long as we’re businesspeople, we’re doing enough for our community — which is self-aggrandizing and just utter horseshit,” he says.
Asked for concrete advice on how VCs can take part in the minimum wage debate, Hanauer suggests that the Bay Area look north. In November, voters in the city of SeaTac, Washington, narrowly approved a labor-backed measure that would require a $15 minimum wage for approximately 6,300 workers in the airport, hotel, and rental car industries. Hanauer is himself now part of a working group organized by incoming Seattle mayor Ed Murray to implement a $15 minimum wage in Seattle, and “I think it will happen,” Hanauer says.
In California, Hanauer says more investors should throw their support behind Ron Unz, publisher of the libertarian-leaning magazine The American Conservative, who has poured his own money into a ballot measure to increase the minimum wage in California to $10 an hour in 2015 and $12 in 2016. The initiative, which will be voted on in November, would make California’s minimum wage the highest in the nation. (California’s current minimum wage is $8.)
“There are a lot of fine people in Silicon Valley,” says Hanauer, “but there’s this really creepy thing happening down there where people are making stratospheric amounts of money and leaving everyone else behind. We need to ensure the economy enfranchises as many people as possible, and we need more civic leadership coming out of the venture community.”
If it takes seeing low-wage workers as potential customers, so be it. “A rising tide lifts all boats,” he says.
LegalZoom, the 14-year-old, Glendale, Calif.-based provider of online legal documents and services, has a new, partial owner. European private equity firm Permira has acquired $200 million of LegalZoom’s existing equity in a secondary transaction that will provide liquidity to existing investors, and to a lesser degree management and employees,reports PandoDaily.
Mashable, the nine-year-old, New York-based independent news outlet, has raised $13.3 million in its first outside funding round. The financing was led by Updata Partners, reports CNN, which has much more here.
Plated, a two-year-old, New York-based company that sends recipes and the fresh ingredients needed to prepare them to its subscribers, has raised $5 million in Series A funding led by ff Venture Capital. Other participants in the round included Lerer Ventures, Founder Collective,Great Oaks Venture Capital and various angel investors. The company had previously raised $1.4 million in seed funding.
Remitly, a 2.5-year-old, Seattle-based mobile payments service that enables consumers to make person-to-person international money transfers from the U.S., has raised $5.5 million led by QED. Other investors in the round included Trilogy Partnership, Founders Co-Op,TomorrowVentures, Bezos Expeditions, and individual investors. The company has raised $10.5 million altogether, according to Crunchbase.
Soft Tissue Regeneration, a six-year-old, New Haven, Conn.-based maker of regenerative orthopedic devices for tendon and ligament repair, has raised $5 million in financing. Existing backers Connecticut Innovations and Launch Capital led the round with participation fromThe Vertical Group. The company had previously raised around $11 million in equity and debt, according to Crunchbase.
View, an eight-year-old, Milpitas, Calif.-based company that makes dynamic glass that’s capable of intelligently adjusting to external conditions and users preferences, has raised $100 million in funding from Madrone Capital Partners. Madrone, in Silicon Valley, specializes in growth capital investments.
Launch Angels, a new Boston-based investment platform that plans to invest in startup deals sourced from equity crowdfunding sites, says it has raised “nearly $1 million” for its first venture fund, named Where Angels Fund. The pool’s LPs are associates from the mobile technology company Where, bought by PayPal for $135 million in 2011. The outfit will focus on early-stage companies with an emphasis on mobile and consumer Internet startups; it intends to back between eight and 12 companies over the course of one year. Launch Angels is also right now gathering commitments for a second and third fund, called the Early Traction Fund and Women-Led Fund, respectively.
Greylock Partners’ Aneel Bhusri became a billionaire yesterday, according to Forbes. Bhusri cofounded and serves as the co-CEO of the enterprise software company Workday; his wealth has been soaring along with Workday’s shares, which are trading at an all-time high today at $86 dollars a piece.
Henry Blodget and company reportedly rebuffed a $100 million offer from AOL to acquire Business Insider in the second half of last year. The nearly seven-year-old, New York-based company has raised more than $18 million in venture funding to date, including from Allen & Company, RRE Ventures, Institutional Venture Partners and Marc Andreessen. Asked about possible talks with AOL, Blodget told Fox Business yesterday: “We love the folks at AOL, and we have enjoyed the many conversations we have had with them over the years. But what we talk about is private.”
Snapchat cofounders Evan Spiegel and Bobby Murphy sat down with Forbes for an “inside story” on the company and the details that emerged are worth reading, including what happened moments after Lightspeed transferred $485,000 to the cash-starved company (at a valuation of $4.25 million) in April 2012. “That was the greatest feeling of all time,” Spiegel tells Forbes. Indeed, as Forbes reports it: “On the day the money went through, [Spiegel] sat in a machine-shop class busily refreshing the Wells Fargo app on his iPhone. In a final homage to Zuckerberg, when the money appeared he walked up to the professor and dropped out of the class and Stanford, a few weeks from graduation.”
Aldexa Therapeutics, a 10-year-old, Burlington, Ma.-based biotechnology company focused on immune-mediated, inflammatory, orphan and other diseases that are thought to be caused in part by naturally occurring toxic chemical species known as free aldehydes, hasfiled to go public. Domain Associates owns 50 percent of the company;Johnson & Johnson owns 45 percent. Aldexa has seen net income of -$37.3 million over the last 12 months.
Square 1 Financial, the 10-year-old, Raleigh, N.C.-based financial services company, has also filed to go public. Square 1’s biggest outside investors include Patriot Financial Partners, which owns 22 percent of the company; Castle Creek Capital Partners, which owns 9.7 percent; Endicott Opportunity Partners, which owns 9.7 percent;Northaven Management, which owns 8.1 percent; and Basswood Capital Management, which owns 6.8 percent. The outfit has enjoyed net income of $18.7 million over the last 12 months.
Cvent, a 14-year-old, McLean, Va.-based event management platform, has revealed plans to sell 4.8 million shares of its common stock in a secondary public offering. Cvent — which had raised $137 million in private backing from Insight Venture Partners, Greenspring Associates and New Enterprise Associates — went public last July.
Morta Security, a two-year-old, Palo Alto, Calif.-based security startup that was founded by former employees of the NSA and United States Air Force, has been acquired by Palo Alto Networks for terms that aren’t being made public, reports the New York Times. Morta Security had raised an undisclosed amount of seed funding a year ago fromAndreessen Horowitz, Greylock Partners, Norwest Venture Partners, Data Collective, Larry Link, and Peter Wagner. The acquisition is Palo Alto Network’s first.
Parature, a 13-year-old, Reston, Va.-based company that makes customer service software, has sold to Microsoft for $100 million, according to TechCrunch. Over the years, Parature had raised $30.2 million in funding from Valhalla Partners, Sierra Ventures, and Accel Partners.
Sense Networks, a 10.5-year-old, New York-based company mobile advertising platform and exchange, has been acquired by the search and advertising company YP, which was itself formed in 2012 through the combination of two AT&T divisions that were then backed byCerberus Capital Management. Sense Networks had raised a reported $9 million from Passport Capital, Intel Capital, and Javelin Venture Partners, among others.
VisualGraph, a year-old, San Francisco-based startup behind some sophisticated machine vision, image recognition, and visual search technologies, has been acquired by Pinterest for an undisclosed amount. Its founder Kevin Jing and software engineer David Liu, who joined VisualGraph in September, are joining the Pinterest engineering team, reports TechCrunch.
JUMP Investors, a 14-year-old, L.A.-based venture capital and private equity firm, is looking to hire a full-time associate. Applicants should have an MBA and, preferably, one to three years of investment banking experience.
Seed funding by venture capital firms hit a four-year high in 2013, according to a new report by CB Insights that claims $893 million was invested in 843 seed deals last year, the most since 2009. Silicon Valley Business Journal has more on the report here.
European venture startups also saw a healthy amount of funding last year. According to the data firm Preqin, European firms raised $8.3 billion over the last 12 months, a 37 percent jump over 2012 funding levels. The number of deals also rose by 8% to 1,352 from 1,250 — the highest number of transactions since Peqin began recording data in 2007.
Corning, a 163-year-old company that once made cookware and railroad lanterns, has emerged as an improbable star of the $280 billion smartphone industry as it develops curved screens and glass that repels germs.
Steven Sinofsky, the former Microsoft exec turned Andresseen Horowitz board partner, on the four stages of disruption.
Never mind the résumé. How hot is the C.E.O.?
Pulling all-nighters can damage the brain, possibly permanently, suggests a new study.
“Downton Abbey” with cats.
Go ahead, complete the circle. Dress like an overgrown baby.
Crock-Pot has a new slow cooker that allows you to turn it on or off or adjust its temperature using its app for iOS or Android. You can also receive “push reminders” so you won’t overcook that Bavarian pot roast while making late-afternoon calls to Tokyo. (StrictlyVC was sold at “Crock-Pot.”)
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