StrictlyVC: September 29, 2017

We didn’t forget you (it’s been that kind of day). Hope you have a terrific weekend, everyone.

Also! We just posted pictures from Wednesday night’s event; we’ll have more content in the coming days, too. Thanks very much again to those of you who came out to spend the evening with us.:)

See you Monday.

Top News in the A.M.

Million of PCs, including Macs, could be vulnerable to a new kind of firmware hack.

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Some VCs Want to Fund ICOs; Here’s What’s Tripping Them Up

Venture capitalists are in a pickle. Companies have raised more than $1.7 billion through initial coin offerings, or ICOs, this year by selling their own customized virtual currencies. For the companies, the trend is a godsend. They can raise the money and use it to fuel new projects without having to give away a piece of their company to venture capitalists. Meanwhile, both accredited and non-accredited investors are buying the tokens on the assumption that once these these projects are completed, their tokens will balloon in value.

Given ICOs’ momentum, it’s no wonder that a growing number of startups are contemplating them. Equally unsurprising is that some VCs, including Andreessen Horowitz and Union Square Ventures, have been looking to capitalize on the trend, in some cases, by participating in what are called pre-sales of companies’ ICOs, wherein they’re purchasing tokens at a discount in exchange for diving in early.

Still plenty of other investors are nervous, and for good reason, starting with the SEC, which hasn’t offered much guidance to date relating to ICOs. Though the agency said in July that it thinks some virtual currencies should be considered securities and therefore made subject to federal securities laws, it’s currently making determinations on a case-by-case basis, depending on “facts and circumstances.”

That kind of wait-and-see stance largely explains why general partner Jules Maltz of Institutional Venture Partners says he’s “actually pretty scared” of ICOs. Speaking at a StrictlyVC event hosted earlier this week by this editor, he told the crowd, “A few of our companies have asked us about them and my conservative feedback to them has been, ‘I don’t want to go to jail as a board member.’ Seriously,” he added. “If you’re issuing something that could be deemed a security, and then everything goes to pieces, and the board wasn’t legally on top of it, I think the companies and the CEO [will be liable].”

Speaking alongside Maltz at the event, Megan Quinn, a general partner at Spark Capital, said her firm is also “treading pretty carefully” when it comes to ICOs, on the assumption that it’s a “matter of when, not if, the SEC becomes much more involved.” Indeed, after she noted that Spark is a venture investor in the popular chat app Kik, which this week closed its high-profile ICO with $100 million, Maltz asked Quinn if Spark has a board seat with the company. Quinn quickly noted that they are “board observers,” to chuckles from the crowd.

Yet the SEC may not even be the biggest complication right now, said two other speakers who’d come to address the crowd of largely VCs and founders, and who spend their days and nights focused on cryptocurrency issues.

Stan Miroshnik, an L.A.-based banker whose outfit, Element Group, is exclusively focused on the digital token capital markets, said that simply figuring out how to appraise a venture-backed company that has also raised money through an ICO is proving a minefield.

Asked specifically how VCs are calculating tokens on their balance sheets and whether these might impact valuations, Miroshnik said he’d “had this same conversation with [global accounting firm] Deloitte this week, and the answer was something like, ‘We have no idea.’ ”

The crowd laughed, but Miroshnik wasn’t joking.

More here.

New Fundings

Bastille, a three-year-old, San Francisco-based security startup, has raised $27 million in Series B funding, including from Bessemer Venture PartnersSpinnaker TrustComcast VenturesBallentine Partners and Keel FundsMore here.

DreamJay, a three-year-old San Francisco-based maker of a medical app that helps prevent nightmares, raised $2.3 million in Series A funding led by Joint Polish Investment Fund, with participation from Nordic Makers. Newscenter.io has more here.

Drive.ai, a two-year-old, Mountain View, Ca.-based developer of artificial intelligence software for autonomous vehicles, has raised $15 million in funding from Grab. The company will open an office Singapore as part of the round, which brings its total funding to $77 million. Business Insider has more here.

Enevo, a seven-year-old, Espoo, Finland-based, dumpster sensor tech company that’s now expanding into waste services, has raised $12 million in funding led by Lifeline VenturesMore here.

MariaDB, the eight-year-old, Espoo, Finland-based company behind one of the web’s most popular open source database servers, has raised $27 million in fresh funding led by Alibaba, which is contributing around €20 million, says TechCrunch. More here.

Peptilogics, a four-year-old, Pittsburgh, Pa.-based pre-clinical stage company that’s aiming to treat multidrug-resistant bacterial infections, raised $5.5 million in Series A funding. Investors include Peter ThielStefan Roever and BlueTree Ventures. FierceBiotech has more here.

Signostics, a 12-year-old, Seattle-based ultrasound tool for bladder and kidney care, raised $35 million in funding from KKR. MassDevice has more here.

Trellis, a 3.5-year-old, Toronto, Ontario-based startup that makes cannabis inventory management software, raised $2 million in funding led by Snoop Dogg’s Casa Verde Capital, with participation from GatewayArgonautic Ventures and One Gun. Business Insider has more here.

Varjo Technologies, a 1.5-year-old, Helsinki, Finland-based virtual and augmented reality headset developer, has raised $8.2 million in Series A funding, including from EQT VenturesLifeline Ventures, and The Venture Reality Fund. VentureBeat has more here.

New Funds

Defy Partners, a Woodside, Ca-based investment firm founded by Trae Vassallo, formerly of Kleiner Perkins Caufield & Byers, and Neil Sequeira, formerly a managing director at General Catalyst Partners, has raised $151 for its inaugural fund, shows an SEC filing. An earlier filing had suggested their target was $125 million so the fund was apparently oversubscribed.

Two former 500 Startups partners, Elizabeth Yin and Eric Bahn, are trying to raise up to $50 million for a new venture capital effort called Hustle Fund, according to an SEC filing. A source tells Axios that the fund will back pre-seed startups.

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IPOs

Rovio, maker of the Angry Birds gaming franchise, saw a small pop of 4.3 percent in its first day of trading as a public company today, but “like the very birds that get catapulted in Rovio’s original blockbuster game, the rise was not to last,” says Ingrid Lunden of TechCrunch. More here.

Exits

Apple has quietly acquired a small French startup called Regaind for unknown terms,  says TechCrunch. The French company, which had raised a bit less than $500,000 from Side Capital. has been working on a computer vision API to analyze the content of photos. More here.

People

German police yesterday arrested and detained Wolfgang Hatz, who’d previously been one of Volkswagen Group’s highest-ranking engineers. He’s the most senior executive to be arrested to date in connection with the scandal. Fortune has more here.

Uber’s new CEO Dara Khosrowshahi will go to London to meet Tuesday the city’s transport commissioner following the city’s decision to withdraw Uber’s licensing. TechCrunch has more here.

Elon Musk wants to fly you to London on a hypersonic space rocket airline? How crazy is that really?

Three women have sued Oracle for allegedly paying women less than men in similar jobs, and they are seeking class-action status on behalf of other women who worked at Oracle. The Information has the story here.

Essential Reads

It may be part of the world’s biggest retailer now, but Jet still has its own personality and that’s no accident.

Detours

How you should, and should not, cook with garlic.

A smartphone that keeps away mosquitoes.

What the critics are saying about “Blade Runner 2049.”

Retail Therapy

Time to head to the Scottish Headlands((?).



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