StrictlyVC: May 14, 2014

It is Wednesday, fine readers! Hope you have a stellar day. StrictlyVC is a little under the weather, so apologies in advance if there’s a higher-than-usual number of typos. We blame the cold medicine.


Top News in the A.M.

Twenty-eight CEOs representing companies that provide Internet service to a majority of Americans sent a letter to the FCC yesterday, warning the agency against adopting more regulations of broadband lines.


Hunter Walk on Thinking Longer Term

It seems like yesterday that Hunter Walk and Satya Patel officially closedtheir first $35 million venture fund, but it was actually early last summer. And in the life of a seed-stage firm like Homebrew — where Walk and Patel have two-thirds of their capital reserved for follow-on investments — that’s an eternity.

No wonder Walk – who previously worked for nine years at Google – and Patel – who logged a decade at Google, Battery Ventures, and Twitter – are already thinking about what a second fund might look like. Walk and I talked about it last week over a burger at a San Francisco eatery. Our conversation has been edited for length.

You say you focus on the “bottom-up economy,” services and tools that make it possible for small players to compete with big companies, including, more recently, looking at bitcoin as a bottom-up currency; 3D printing as bottom-up manufacturing; and drones as bottom-up satellites. How else does Homebrew distinguish itself?

We didn’t create Homebrew to create more noise in a crowded marketplace. We felt there was still a pretty small number of seed-stage funds that will be around for a long time, that have been started by former operators, and that want to take front-of-the-round positions.

Why makes you better positioned than some?

First, having a partner who has done venture before [is a big advantage]. There’s also a set of best practices and certain frameworks and models that we’ve thought about in advance — such as [around] what cash flow and portfolio management look like — that sometimes folks who’ve only come from an operating background or angel investor background don’t really understand.

You’ve told me you could have raised more money last year. Will you go bigger the next time and will we see a third partner?

That’s something we’ve discussed only lightly and I don’t think we’d do it in the near future. In some ways, we started Homebrew because we didn’t want to join existing funds . . . And so it’s this ironic situation where, if we were to try to find a third or fourth partner down the road, would we suddenly be the incumbent? How would we attract an entrepreneurial VC versus someone who just sees us as an existing fund? So we have to think about all that.

I think the incentives are to raise more money, [between] management fees, ego, and deal flow optionality – you get exposed to a lot of things you want to invest in. But we’re not doing this to [eventually] raise a $500 million multistage fund or become a 12-partner business that builds out shared services and competes with billion-dollar funds. We know firmly which side of the [investing] barbell we want to be on.

Roughly one year into this endeavor, what’s been the biggest surprise?

With venture — and I think it’s one of the reasons I write so much, working through my own learnings – the fund cycle is long. Satya just saw two exits from companies he invested in at Battery in 2007 and 2008. So you want to bring a sense of urgency every day, to lean in and help [your startups], but you also have to manage your own energy and keep the founders who are burning hard every day in the right frame of mind.


By making their lives simpler [and doing what you can] to clear the road ahead. We also ensure boards are formed with an outside board member. Most seed investors don’t ask for a board seat and don’t care if there’s an outside board member. We care a lot, not because we want control but because we want first-time founders to build confidence and a management cadence and, when it comes time to raise a Series A, signal to other investors that theirs is a company that’s been operating with some maturity.

You don’t need a bunch of people around the table. But having worked for strong founders [at Google and Twitter] and seen the benefit of founder-driven companies — not just in year one but in year 10 — we want folks who are building something that, in their head, will be around a while. And our job is to help prepare them for that, because it’s not easy.


New Funds

AdSame, a 4.5-year-old, Shanghai-based digital marketing service that offers online media planning, performance monitoring, evaluation and more for a variety of customers, has raised $30 million in new funding led by Pacific Venture Partners and Dream Capital Groupreports TechNode. Earlier investors, including Matrix Partners and Vertex Ventures, also participated. AdSame has raised at least $50 million to date.

Agiliance, a nine-year-old, Sunnyvale, Ca.-based maker of security risk management software, has received $5 million in funding from the specialty finance firm Wellington Financial. The company has raised $24 million altogether, shows Crunchbase, including from Intel CapitalWalden International,Red Rock Ventures and Castile Ventures.

Attensity, a 14-year-old, Salt Lake City, Ut.-based company whose software detects consumer sentiment by sifting through structured and unstructured data, has raised $90 million in new funding. The funding comes from what the company describes in a release as simply an “international private equity fund” and that VentureWire is reporting is earlier investor Aeris Capital AG, the investment vehicle of SAP AG co-founder Klaus Tschira. Attensity has raised $148 million altogether.

BodeTree, a 3.5-year-old, Tempe, Az.-based company whose online financial analytics dashboard aims to help small owners better understand their finances, has raised $2 million in Series A funding led by Greenline Ventures, a Denver-based investment firm. Other, undisclosed angels also participated in the round.

Boxed, a year-old, New York-based company whose smartphone app allows users to order consumer packaged goods in bulk (with two-day free delivery), has raised $6.5 million in Series A funding led by Greycroft PartnersFirst Round Capital and Signia Venture Partners. Other investors to participate in the round included ENIAC VenturesSocial StartsBoxGroup, former Facebook COO Owen Van Natta and former Zynga COO David Ko.

Bunkr, a 2.5-year-old, Upper Normandy, France-based maker of software presentation tools, has raised $1.4 million from Idinvest Partners, along with individual investors Daniel Marhely and Xavier Niel. TechCrunch has more here.

Ceterix Orthopaedics, a four-year-old, Menlo Park, Ca.-based maker of surgical tools for arthroscopic procedures, has raised $18 million in new financing led by earlier investors Novo A/SVersant Ventures and 5AM Ventures. The round also included an unspecified amount of debt financing from Silicon Valley Bank and Oxford Finance.

Ditto Labs, a two-year-old, Cambridge, Ma.-based photo-analytics startup created by a team of MIT-trained computer scientists, has raised $2.2 million in seed funding from various individual investors, including Anthony Tjan, managing partner of Cue Ball Group; John Battelle, executive chairman of Sovrn Holdings; David William Baum, partner at Stage 1 Strategies; Nicholas Negroponte, co-founder MIT Media Lab; and Mike Sheehan, CEO of The Boston Globe.

Life360, a 5.5-year-old, San Francisco-based company whose mobile application securely connects family members and close friends in case of an emergency, has raised a $25 million strategic round of investment from the publicly traded home security giant ADT. The money represents the first tranche of a $50 million Series C round slated to close within the next month, reports VentureWire. The round will push the startup’s total funding to $76 million from roughly two dozen investors, including DCM,Bessemer Venture PartnersSeraph Group500 Startups and Kapor Capital., a year-old, Seattle-based startup whose online platform provides users with instant, real-time estimates for any home project (then helps them schedule appointments with home improvement professionals), has raised $3.5 million from investors, with another round likely to follow, reports Geekwire. The company’s backers include Madrona Venture GroupAndreessen HorowitzRedpoint Ventures,Two Sigma VenturesSherpa Foundry and Bezos Expeditions.

ResponseTap, a six-year-old, Manchester, England-based company that sells voice-centric marketing technology and advanced visitor-level call-tracking, has raised roughly $6.7 million in Series B funding from Beringea and Eden Ventures. The company has raised $9.3 million to date, shows Crunchbase.

Sift Science, a 2.5-year-old, San Francisco-based cyber security startup that uses machine learning to sniff out credit card fraud, has raised $18 million in Series B funding led by Spark Capital, with participation from Union Square VenturesFirst Round Capital, and Max Levchin. The company, founded by former Google engineers, has raised $23.5 million altogether.

SolveBio, a year-old, New York-based company that wants to make it simpler for developers to integrate genomic data into their applications, has raised $2 million in seed funding. The round was led Andreessen Horowitz, which was joined by SV Angel and numerous individual investors, including the founders of Flatiron Health, a company that last week announced a $130 million Series B round led by Google Ventures.

YouEarnedIt, a 2.5-year-old, Austin, Tx.-based software platform that encourages employees to recognize the good work of their colleagues and give them “props” that their employers can see, has raised $1.5 million in funding from Capital Factory and WPP, the publicly traded advertising giant. (Founder Kenny Tomlin sold his digital ad agency, Rockfish, to WPP Digital in 2011, though he remains CEO of the company.)

New Funds

Sierra Ventures, the 32-year-old, San Mateo, Ca.-based early-stage venture firm, has closed its Fund X at $145 million — less than half the size of its $400 million ninth fund, which closed in October 2006, reports VentureWire. That ninth fund required five months of fundraising; the firm began fundraising efforts for its new fund, which originally had a $200 million target, in December 2011.

Unsurprisingly, the firm has seen personnel shifts. Partners Vispi Daver and Robert Walker are long gone, for example. Last year, the firm also brought in Al Campa, the former chief marketing officer for Taleo Corp. (sold to Oracle in 2012) as a partner, but his title has since changed to entrepreneur-in-residence.

Going forward, reports VentureWire, managing directors Tim GuleriMark FernandesBen Yu and partner Aaron Tong will invest from the new fund. Three other managing directors — Steven WilliamsPeter Wendell and David Schwab — will manage their existing investments alone as they move on to other things.

Schwab, for one, has already revealed his next steps, announcing the founding last month of Vertical Venture Partners, a fund that will invest in the companies and technologies invented by UC San Diego faculty, students, and alumni. Xconomy had more on the story here.



Meh Labs, a 2.5-year-old, Palo Alto, Ca.-based company whose mobile messaging app, Blink, lets users share self-destructing messages, has been acquired by Yahoo for undisclosed terms, reports TechCrunch. The company’s seven employees will join Yahoo and the app will be shut down. Meh Labs had raised $1 million in seed funding from Triple PointNew Enterprise AssociatesAngelPad, and numerous angel investors.



Age 30 and younger: The 14 rising stars in Silicon Valley who “find hot startup deals and invest millions.”

Nathalie De Clercq, a founding partner at WipLabs Designs, a New York-based e-commerce businesses, is suing People magazine for incorrectly identifying her in a photo as Amanda Rosenberg, the alleged mistress of Google co-founder Sergey Brin. In papers filed in Manhattan Supreme Court, De Clercq says People ran a picture of her wearing Google Glass while on a bike ride in Central Park, a mistake that has turned her into “a laughingstock,” her attorney tells the New York Daily News. De Clercq has further been “handicapped by being the object of ridicule and derision,” says the attorney. “Her reputation has been harmed and it’s difficult for her to go on with her life.”

Mark Heesen — who long led the efforts at National Venture Capital Association, first as its head of public policy for eight years beginning in 1991 and then as its president for 14 years, beginning in 1999 — was given a lifetime achievement award by the organization yesterday at its VentureScape conference. Heessen “served on the front lines of some of the biggest public policy debates of the last two decades, and his leadership cemented NVCA has an authoritative and go-to credible resource inside the beltway,” NVCA chair Josh Green said in a statement afterward.

Venture capitalist Vinod Khosla, who is becoming known to many as themogul at the center of a lawsuit over public access to Martin’s Beach in San Mateo County, Ca., testified Monday that he didn’t recall details about his decision to deny public access to the once-popular beach, where he owns a roughly $40 million property. Khosla, who took the stand for an hour and 14 minutes, repeatedly said he didn’t remember seeing certain documents, including one from a judge saying he would need approval to close off access to the beach.

Anthony Noto, who’d become one of Goldman Sachs‘s highest-profile investment bankers and is widely credited with landing the Twitter IPO, has left the bank to join the hedge fund Coatue Management. Dealbook has much more on Noto’s move — and what it means for both Goldman and Coatue — here.


Job Listings

Funding Circle, the venture-backed online marketplace that allows individuals to lend money to small and mid-size businesses, is looking for a business development analyst in San Francisco.



VetsinTech, a nonprofit made up of tech investors and military veterans who train, connect, and find jobs for veterans interested in tech careers, will gather together roughly 60 veterans today at the offices of Next World Capital in San Francisco for an inaugural VetCap workshop. VetCap is a new initiative to help train veterans who are entrepreneurs on where and how to raise capital, and to connect them to a network of financing sources. More information here.



Why consumer metrics are all terrible.


Essential Reads

This company promises email that can self-destruct in five seconds.

Apple’s iPad may soon feature a new split-screen multitasking feature, according to the outlet 9to5Mac. The feature will reportedly allow iPad users to run and interact with two iPad applications at once.

Skype’s co-founder Janus Friis is looking to take on Fitbit with a new data-heavy health and wellness-focused wearable device, and he’s assembled a high-profile team for his stealth startup dubbed Project Florida toward that end. GigaOm has more here.



Deciphering social media with charts.

Why we favorite tweets.


Retail Therapy

Fuselage wall clocks.

You can now buy Google Glass, as long as you live in the U.S.

If you enjoy whiskey and pork, you’ll love reading what a distillery in Iowa is doing. (Or not.) H/T: Marc Andreessen


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