StrictlyVC: October 11, 2013


Top News in the A.M. 

Andreessen Horowitz has decided to largely eschew Series A fundings, with Partner Scott Weiss telling the WSJ that, too often, consumer-facing startups are founded by “MBA types” and that helping companies that are already gaining traction will now be a much greater focus for the firm.

Last week, we argued why, then how, venture capital firms could take advantage of new general solicitation rules. Today, ff Venture Capital becomes the first institutional venture fund to do just that. (See below in New Funds.)

If Washington doesn’t get its act together today, by Monday, Washington D.C. will run out of cash to keep basic services functioning, like public libraries and trash collection.

Does Jeff Bezos Need a Wingman?

Yesterday, Bloomberg published an excerpt from a new book on Jeff Bezos that portrays the billionaire CEO of Amazon as a brilliant but ruthless dictator, one who treats workers “like expendable resources.”

Michael Maccoby, a psychoanalyst who writes about business executives and teaches leadership at Oxford’s Saïd Business School, doesn’t view Bezos’s tendencies to mistreat employees as his biggest liability, though. Rather, it’s his lack of a strong number two.

Amazon’s success has certainly been stunning. As the book points out, 20-year-old Amazon now has roughly $75 billion in annual revenue, a $140 billion market cap, and nearly 100,000 full-time and part-time employees, up 40 percent from last year. In late summer, Bezos personally acquired the Washington Post newspaper and some related properties for $250 million.

Maccoby, who has worked closely with 40 CEOs over the years but has studied many more, thinks Bezos resembles “narcissistic visionaries” like Steve Jobs, Larry Ellison, and Bill Gates — with one major exception. All had a right-hand man; Bezos seemingly does not. And “that kind of personality needs to have strong partners who balance them and who complement their skills,” insists Maccoby.

Maccoby points to Microsoft co-founder Bill Gates, who, in the company’s earlier days, could dream about the future while sidekick Steve Ballmer obsessed about Microsoft’s day-to-day operations. Maccoby also cites Steve Jobs’ relationships, first with his Apple cofounder Steve Wozniak and much later with Apple executives Tim Cook and Jony Ive. And there is Oracle’s Larry Ellison, who has brought in a string of executives over the years, only to chew them up and spit them out. (Ellison’s current number two is co-president Mark Hurd.)

Asked whether Bezos might be an exception to the rule, Maccoby says, “So far, so good.” Still, he thinks Amazon’s decision to forego profits in favor of reinvestment are reminiscent of numerous endeavors throughout history, including those of, gulp, Napoleon.

It’s not necessarily an unfavorable comparison. Both enjoyed success at a young age, both rejected the established wisdom, and both took on seemingly invincible enemies and defeated them. If historians are to be believed, Napoleon – like Bezos – also had unrivaled intellectual powers and an astonishing capacity to integrate information from different disciplines.

Of course, as brilliant as Napoleon was, he eventually pushed his luck, ignoring repeated advice not to invade Russia. Says Maccoby: “Napoleon was very successful as long as he had Talleyrand as his foreign minister.” When he lost Talleyrand, he spun out of control.

“The danger with someone like Bezos is the same danger that Napoleon had,” Maccoby adds. Without enough pushback, “you can go too far.”


New Fundings

AboutOne, a three-year-old, Malvern, Pa.-based company behind an online family mangement journal platform, has raised $1.79 million in a partial raise, according to an SEC filing. The company had previous raised nearly $2 million from the Golden Seeds angel network.

Achates Power, a nine-year-old, San Diego-based developer of fuel-efficient combustion engines, has raised a $35.2 million Series C round from existing investors Sequoia CapitalRockPort Capital PartnersMadrone Capital PartnersInterWest Partners and Triangle Peak Partners.

GreenWave Reality, a five-year-old, Irvine, Calif.-based company that makes home energy management devices and related software, has raised $19 million in Series B funding led by The Westly Group, with participation from Craton Equity Partners.

Lookout, a six-year-old San Francisco-based company that makes software that protects personal devices, has raised $55 million in new funding. Deutsche Telekom led the round, which included participation from Qualcomm Ventures, Greylock Partners, Mithril Capital and previous investors Accel PartnersAndreessen HorowitzIndex Ventures and Khosla Ventures. The company has raised roughly $130 million since 2009.

Newsela, a new, New York-based site that features daily news articles from around the country, at five different reading levels, has closed $1.2 million in seed funding led by New Schools Venture Fund and Kapor Capital.

Silver Ridge Power  an Arlington, Va.-based joint venture between The AES Corporation and Riverstone Holdings that is developing and will operate numerous solar power plants — has received $103 million from Google for its Mount Signal Solar project, based in Imperial County, Calif. The plant is expected to be up and running next year, and has agreed to sell its output to the San Diego Gas & Electric Company.

Telepath, a young, U.K.-based consultancy focused making better sense of fleet management data for its customers, has raised $758,000 in seed funding from The North West Fund for Venture Capital and Enterprise Ventures.


New Funds

Today, 5-year-old, New York-based ff Venture Capital becomes the first venture firm to embrace the new general solicitation rules. This morning, in fact, it’s announcing, quite publicly, that it’s raising between $50 million and $70 million for its third fund, ff Rose Venture Capital Fund. In a blog post, founding partner John Frankel notes that with venture capital itself “getting disrupted,” “[w]e wholeheartedly support the reinvention that comes along with it.” A spokeswoman tells me that the firm plans to use “21st century technologies” including “online media, social media channels, television, and email” to reach investors. The firm’s last fund, a $27 million vehicle called ff Silver, closed in 2010. The firm claims to have “consistently generated a gross IRR on invested capital of 30 percent.”

London has a new, $60 million, early-stage venture fund called Episode 1 (after a “Star Wars” movie, really). Episode 1 combines public and private money, so it can fund only U.K.-based startups or companies that have a significant presence in the country, but that’s the point of the fund anyway. You can read much more about it here.

Nextview Ventures, a three-year-old, Boston-based seed-stage fund is raising a second fund, according to an SEC filing, which doesn’t list a target. Nextview focuses on seed-stage, Internet-enabled startups, and has already backed roughly two dozen companies. One of its newest portfolio companies is Sunrise, a New York-based maker of a free calendar app; another is the online payment platform Plastiq, based in Boston.



TenMarks, a five-year-old, Burlingame, Calif.-based company that produces an online math curriculum, is being acquired by Amazonreports Techcrunch. Terms of the deal have not been disclosed. TenMarks has raised $4.6 million in venture and debt financing over the years, including from Catamount Ventures and Birchmere Ventures.

Familiar, two-year-old, Seattle-based private photo and video sharing service, has been bought by Taser, a company known best for its stun guns. The company will incorporate Familiar’s technology into its software and cloud services operation, Terms of the deal were not disclosed. Familiar has raised $1.3 million from Greylock PartnersRedpoint VenturesIndex Ventures and others. One of its first checks came from entrepreneur-investor brothers Hadi and Ali Partovi.



Criteo, the eight-year-old, Paris-based performance display advertising company, announced terms for its IPO yesterday. It plans to raise $176 million by offering 7.2 million shares at a price range of $23 to $26, for a market value of roughly $1.5 billion.

Trevena, a six-year-old, clinical-stage biopharmaceutical company based in King of Prussia, Pa., has filed to go public, though the number of shares and pricing terms have yet to be decided. Trevena has raised roughly $130 million from investors; its principal stockholders include Alta PartnersNew Enterprise Associates, and Polaris Partners, each of which own 20.8 percent of the company.



Facebook CEO Mark Zuckerberg has purchased the four homes surrounding his own Palo Alto house for a collective $30 million, reports the San Jose Mercury News. Zuckerberg is leasing the homes back to their owners; he decided to purchase the properties after learning of a developer’s plans to buy one of the parcels, build a huge house atop it, then advertise its proximity to Zuckerberg.

Mike Hopkins, a Fox executive, is poised to become Hulu’s new CEO, reports Bloomberg. Hopkins would replace Andy Forsell, who has been the company’s acting CEO since March.

Vivian Schiller, chief digital officer at NBC News, is about to become Twitter‘s head of news, reports AllThingsD, though Schiller is expected to take time off in between jobs. Much more here.


Job Listings

Khosla Ventures-backed portfolio company in New York is looking for a director of digital marketing. Applicants should have at least 8 years of experience in digital marketing, several years of management experience, and familiarity with the ad tech industry, among other things.


Essential Reads

A first look inside Google‘s futuristic quantum lab.



The bigger the driver’s seat, the (much) higher the chances that someone will double-park their car.

The secret factor in China’s housing bubble? Mistresses!


Retail Therapy

This wallet is made of buttery soft vegetable tanned bridle leather from Wickett & Craig of Pennsylvania. Is yours?

If you want to look this cool this fall, dress like a lumberjack! You heard it here first. No one has ever said it before anywhere (ever).

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