Steve Ballmer is out; now three top Microsoft shareholders want Bill Gates to scoot along, too.

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Todd Chaffee on IVP’s Twitter Stake: Fred Wilson was “Instrumental”

Any day now, it’s expected that Twitter will make its IPO filing public, revealing exactly who owns what.

No one yet knows Institutional Venture Partners’s stake in Twitter, but based on the $35 million Series C round for the company that IVP led in January 2009, it’s clear the Sand Hill Road firm will generate a world-class return on its investment.

Yesterday, as part of a longer conversation, Chaffee shared the story of how that Twitter funding came together. It’s a good reminder of the importance of relationships in this business:

“One of the things we’re always doing is surveying the landscape for breakout companies, where they’re starting to gain traction…and their users and other metrics are starting to track up.  Twitter was classic case of company just starting to break out. 

One variable for us is: What could this be in terms of potential? An early-stage company can be interesting and getting some traction, but when you run the profile, [you realize it has the potential] of making 3x to 5x your return, [which isn’t a compelling enough exception for IVP, which specializes in later-stage companies that already have meaningful revenue]. 

Twitter fit our criteria [of being able to deliver a much bigger return]. And we had a view into that, so we called [early Twitter investor] Fred [Wilson] and asked if the Twitter guys would see us. 

‘We’re not raising money right now,’ Fred told us. ‘Go away.’ But we’re co-investors [with Union Square Ventures] in Comscore [which tracks Web and mobile usage]. And so [after another plea or two] Fred asked if the Twitter guys would see us, telling them, ‘Just meet with them, and when you’re ready to raise, [IVP] will be there.’ 

So we had them come in [to our office] on a Monday in early January 2009, and when we heard them describe the company as the ‘pulse of the planet’ — those were their words — we could see this was much more than a microblogging service. Ev Williams and Biz Stone are sharp guys. Some entrepreneurs have a vision that’s clearly infectious and much bigger than everyone realizes, and [that was the case here], so it was pretty straightforward. In fact, you could see everyone around the table, thinking, This one could really go. Meanwhile, they [thought] IVP was asking all the right questions, [that we could] see opportunities and threats more clearly than anyone else, and they told Fred that they could see IVP as a partner.

It was a hot deal for us, so we scrambled the jets and the next day I went up there [to San Francisco from Menlo Park] with [IVP colleagues] Dennis [Phelps] and Jules [Maltz] for a day of due diligence. This was a Tuesday. Wednesday night, I had dinner with Ev Williams. On Thursday, he was calling our CEOs to see what it’s like to work with IVP. And by Friday, we had a term sheet.

Eventually, that news broke, and it brought everyone out of the weeds to outbid us. We asked [Williams and Stone], ‘Who do you like best of these groups?’ and they said Benchmark [Capital], so we dialed Benchmark into the deal.

Fred was absolutely instrumental. Because Ev and Biz hadn’t done this many times, I [feel] like Fred was the one who really opened the door for us and said [to them], ‘Let’s do the IVP deal.’”

(Look for the inside story behind IVP’s rise to the top — and how the firm plans to stay there — on Friday.)

New Fundings

Algolia, a year-old, Paris-based company focused on helping developers to make their apps or sites smarter through its search technology, has raised $1.5 million in seed funding from Index Ventures, Point Nine Capital and Alven Capital.

CardFlight, an 18-month-old, New York- based company that enables developers to integrate in-person card payments into their own app, has raised $1.6 million in seed funding led by ff Venture Capital. The round also included Payment Ventures, Apostolos Apostolakis, Entrepreneurs Roundtable Accelerator, Plug & Play Ventures, and Great Oaks Venture Capital.

Estify, a  graduate of Amplify LA’s business accelerator that produces software for the auto collision industry, has raised an $800,000 round of seed capital, led by ff Venture Capital, with participation from Romulus Capital, REES Capital and Amplify LA.

Listia, a four-year-old, Mountain View, Calif.-based online trading marketplace, has raised $9 million led by General Catalyst Partners. The company had previously raised $2 million in seed funding, including Andreessen Horowitz, SV Angel, Y Combinator and individuals such as Max Levchin.

Quantopian, a year-old, Boston-based company that’s building an algorithmic trading platform for browsers, has raised a $6.7 million Series A round from Khosla Ventures and Spark Capital. In January, the company announced it had raised a seed round of $2.1 million from Spark Capital.

Sefaira, a four-year-old, U.K.-based company that makes cloud-based efficiency software that helps architects design higher-performing buildings, has raised $2 million in debt from Silicon Valley Bank. The company has previously raised $18 million in equity from Braemar Energy Ventures, Chrysalix, and the Hermes GPE Environmental Innovation Fund.

Tackk, a year-old, Cleveland, Oh.-based company that makes an online content creation and sharing tool, has raised $1.2 million in new funding led by ff Venture Capital, which was joined by several existing investors, including Hatch Partners and Drummond Road Capital.

Telogis, a 13-year-old company, Aliso Viejo, Calif.-based company whose software tracks commercial vehicles, has raised $93 million from investors, including Kleiner Perkins Caufield & Byers. The company plans to go public next year.

Wrike, a seven-year-old, San Jose, Calif.-based maker of collaboration software, has closed $10 million in Series A financing from Bain Capital Ventures. Wrike had raised $1 million in seed funding last year from TMT Financing.

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New Funds

SAP Ventures, a group spun out of the enterprise software giant in 2010, has raised $650 million for a direct investment fund, with the money coming from SAP and SAP Ventures’ executives. The firm has also created 10-person biz dev team intended to help its portfolio companies grow. SAP Ventures has been managing its first direct investment fund, a $353 million fund, since 2011; it also manages a $405 million fund of funds that owns stakes in other venture capital funds, including August Capital.

Peer Venture Partners, a Sand Hill Road firm with an exceedingly low profile (and bare-bones site), has just raised $36.6 million for its fourth fund, according to an SEC filing that lists the total offering amount as “indefinite.” Listed on the filing are Jared Hutchings and Mark Campbell, who previously helped manage University Venture Fund, the University of Utah’s student-run fund.

Emerald Ocean Capital Group, a Newport Beach, Calif. firm, is the process of raising a $10 million venture fund for marijuana startups. Dudes.

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People

Foundation Capital has a new EIR: Mitali Pattnaik, a former product and marketing lead at Twitter and Google has joined the firm to focus on building a new, consumer-focused companies. Foundation says Pattnaik is exploring “several areas of interest,” including education, mobile and collaborative consumption.

Jim Orlando is the newest managing director at OMERS Ventures, the venture capital investment arm of the OMERS pension plan. In the role, Orlando — who was most recently a managing director at OMERS Private Equity and has worked previously at Bell Canada and Battery Ventures — will be responsible for leading tech, media, and telecommunications investments in North America.

Mohammad Sabah, the former manager of data science and analytics at Facebook, is joining venture-backed Identified as its “chief data officer.” Identified, in San Francisco, transforms social data from Facebook into intelligence for consumers and enterprises. Since its fall 2010 founding, it has raised $22.5 million, including from Transmedia Capital, Capricorn Investment Group and a long list of individuals, such as Alexander Tamas, Chamath Palihapitiya, and Bill and Tim Draper.

MG Siegler, a partner at Google Ventures, is among a growing number of venture capitalists who is now spearheading an AngelList syndicate.

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Exits

41st Parameter, a nine-year-old, Scottsdale, Az.-based company that produces fraud detection and prevention software, is being acquired for $324 million by the global information services company Experian. Over the years, the company had raised roughly $38 million from Kleiner Perkins Caufield & Byers, Jafco Ventures, and Norwest Venture Partners, among others.

Yahoo is acquiring Hitpost, a South San Francisco-based company whose apps allow sports fans to connect and compete. The three-year-old company had raised roughly $2 million from investors, including RRE Ventures, Floodgate, and numerous angel investors. Terms of the acquisition were not disclosed.

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IPOs

The government shutdown won’t delay Twitter’s public offering. Here’s why.

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Job Listings

Singularity University, an elite Silicon Valley think tank, is launching a new venture fund and it’s looking for a managing partner for that fund. To apply, you’ll need previous experience with early-stage fund management, some board service, and an MBA. If you happen to have experience investing internationally, all the better.

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Essential Reads

New York Magazine profiles Tumblr founder David Karp. Said one source to the magazine of Tumblr’s sale to Yahoo: “It was the biggest game of chicken I’ve ever seen in a startup. Literally months away from bankruptcy, and he manages to find an angel in Marissa Mayer.”‘

Eek. Authorities and Internet-security experts say tens of thousands of dubious websites are popping up across the Internet.

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Detour

What it’s like to sell your company to Google: “Desks, laptops, no servers, here’s the intranet, figure it out.”

Truly amazing feats of facial hair.

Banksy is hosting a “show” on the streets of New York this month. Details are here.

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Retail Therapy

Time to say goodbye to that back-breaking rucksack you’ve been lugging along on your bike ride, and say hello to these cool, custom-made bicycle bags.

Happy socks! Who couldn’t use a pair of these?

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The government has shut down, meaning 800,000 federal workers will be furloughed, and another million employees will be asked to work without pay.

For you history buffs with some extra time on your hands today, here’s a recounting of every previous government shutdown, along with how they ended.

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The Case for Objective Ratings on AngelList

Last week, AngelList, the hugely popular platform that connects entrepreneurs with accredited investors, introduced what many have heralded as a game-changing new twist to its business. Called its Syndicate program, AngelList now allows angel investors to syndicate investments themselves, work for which they will receive carry. (An angel who syndicates a deal will earn 15 percent of any upside, while AngelList will collect 5 percent.)

If some of these syndicates involve the same groups of investors, and those groups morph into venture funds, don’t be surprised. As some angels have said on social media since AngelList announced its new program, it might allow many of the “best” angels to strengthen their brands and, potentially, move up the investing food chain.

And there’s no reason why angels shouldn’t be able to extract more leverage from their investments, particularly if they’re willing to manage a big syndicate or serve on a company’s board.

Still, while the syndicate program seems like a well-considered start, AngelList might think about providing some public accounting of the track records of its various syndicate leaders. As the gossip site Valleywag pointed out in its inimitable way yesterday, without a structure that manages to disclose something about the investors’ IRRs, the program seems likely to degenerate into a popularity contest. Much of AngelList’s matchmaking still rests on “social proof,” which isn’t quite the same thing as cash on cash returns.

Last week, for example, author and entrepreneur Tim Ferriss raised $350,000 for a logistics startup called Shyp in 53 minutes. Ferriss’ fundraising prowess is impressive, and nobody is prejudging Shyp, but it’s hard not to be skeptical about investments that are closed in less than an hour.

Most VCs wouldn’t wish their fundraising process on their worst enemy, but it does help them demonstrate their qualifications and commitment to the investment process to both their investors and their fellow partners. Through vetting their PPMs with Cambridge Associates, undergoing lengthy and arduous roadshows with family offices and pension funds, and sacrificing a large amount of their own capital – typically 3 percent – in order to launch their funds, venture investors let it all hang out. (Yes, there are top-tier funds that are able to raise funds by picking up the phone a few times, but that’s the exception not the norm.) By the time a firm has raised a fund, they have left a trail of evidence testifying to the work they will put into an investment. Can the same be said of Ferriss?

Obviously, AngelList doesn’t need to replicate the venture business – it’s large enough as it is. But in the interests of both entrepreneurs and the syndicates themselves, it might be time for AngelList to adopt an objective ratings process, one that would provide everyone with more insight into an investor’s qualifications than just his or her Klout score. It would make an already promising program even better.

New Fundings

Cydan, a Cambridge, Mass.-based company focused on de-risking compounds with therapeutic and commercial potential, has raised $10 million in new financing from Lundbeckfond Ventures and Bay City Capital. Existing investors NEA and Alexandria Venture Investments also participated.

Dataguise, a seven-year-old company based in Fremont, Calif., has raised $13 million in Series B funding led by Toba Capital, which was joined by undisclosed investors. The company, a maker of data security intelligence and protection software, received a $7.3 million Series A round of financing in 2011, including from tech investor Herb Madan.

HelloFresh — a two-year-old, Berlin-based meal planning startup that invites users to choose from its online recipes, after which it delivers them the ingredients they need — has raised $7.5 million in Series C funding. The round was led by Phenomenon VC of Russia and included Vorwerk Ventures, Holtzbrinck Ventures, Investment AB Kinnevik and Rocket Internet. To date, the company has raised $17.5 million altogether.

MokiMobility, an 18-month-old, Salt Lake City, Utah-based company whose cloud-based software helps secure, monitor and otherwise manage mobile devices, has raised $6.6 million in funding from EPIC Ventures, Pelion Venture Partners, Allegis Capital and Plus550.

OMsignal, a two-year-old, Montreal-based company that makes apparel designed to track a wearer’s biometrics, has raised an undisclosed amount of funding from new investor Mistral Venture Partners, whose managing director, Code Cubitt, has joined the board. OMsignal raised $1 million in seed funding earlier this year from Real Ventures, Golden Venture Partners, and David Cohen.

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New Funds

Three Crescendo Ventures partners who quietly raised at least $10.5 million for a new fund last year appear to be in the market again. Under the new brand Decathalon Alpha, John Borchers, David Spreng and Wayne Cantwell — all longtime GPs at Crescendo in Palo Alto, Calif. — are looking to raise a $150 million fund. They’ve so far secured $12.9 million toward that end, too, says a new SEC filing. (Interestingly, the form lists their location as Park City, Utah. I’ve asked for more information, and I’ll write more about their effort as I learn more.)

Miramar Digital Ventures, a four-year-old venture capital firm based in Corona Del Mar, Calif., is looking to raise up to $50 million for a new fund, according to an SEC filing. The form lists two partners: Bruce Hallett, who cofounded the firm and was previously managing partner of the Brobeck, Phleger & Harrison Orange County office, and Sherman Atkinson, who joined the firm two years ago and was previously was a CEO-in-Residence with Austin Ventures and before that, COO of Intermix Media. According to the filing, the firm has yet to begin raising capital for the new fund.

Endeavor Global, a New York-based nonprofit organization that selects, mentors and “accelerates” people who it identifies as “high-impact entrepreneurs” has filed a form with the SEC, outlining its plans to raise $50 million dollars in donated capital to further support the entrepreneurs with which it works. (The idea is to plug any returns into the rounds of future entrepreneurs.) The filing lists just $1.275 million in capital raised so far, but according to numerous reports and Endeavor’s own site, numerous supporters have already pledged $1 million to the new fund, including Michael Ahearn, chairman of True North Venture Partners; Edgar Bronfman, Jr, the former chairman of Warner Music Group; Michael Cline, a managing partner of Accretive LLC; Reid Hoffman of LinkedIn and Greylock Partners; and eBay founder and chairman Pierre Omidyar.

Altimeter Capital, the Boston-based investment firm run by travel entrepreneur Brad Gerstner, is raising a $15 million special purpose vehicle, according to an SEC filing, which reflects that the funds have yet to be raised. In late July, Gerstner, who has raised roughly $600 million since 2008 to take long and short positions in mostly public companies, also began raising a $75 million venture fund.

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People

More job cuts are forthcoming at Fab.com, its CEO hints in one of those awful emailed memos to employees.

Billionaire businessman Mark Cuban is finally going to trial over regulators’ claims that he engaged in insider trading nine years ago, in a case that many consider to be a huge gamble by the SEC.

Brad Feld and his partners at Foundry Group have decided to stop reading articles about AngelList’s new syndicate program and form a syndicate for themselves to see how it goes.

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Exits

Apparently, not even Debra Chrapaty could save the cloud computing and storage services company Nirvanix, which has shut down. I interviewed Chrapaty earlier this year when she left her post as the CIO of Zynga to join six-year-old Nirvanix as its fifth CEO. Chrapaty is a respected contact of Khosla Ventures, which had invested a $25 million round in Nirvanix in May of 2012 and, in an apparent effort to turn around the company, installed Chrapaty as the company’s executive chairwoman last November, before elevating her to chief executive in March. Nirvanix, founded in 2007, had raised $70 million over five rounds of funding, including from Valhalla Partners, Intel Capital, Mission Ventures and Windward Ventures.

Power2Switch, a Chicago-based company whose free service helps consumers shop and compare electricity providers online, has been acquired for an undisclosed amount by competitor Choose Energy of Plano, Texas. Power2Switch launched out of the University of Chicago’s Booth School of Business in 2010 and had raised $1.3 million, including from New World Ventures and Hyde Park Angels. Choose Energy, founded in 2005, raised a $4 million Series A earlier this year from Kleiner Perkins Caufield & Byers and Stephens Capital Partners.

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IPOs

Fully 26 venture-backed IPOs raised $2.7 billion during the third quarter of this year, a 13 percent increase from the second quarter and an 11 percent increase, by dollars according to Thomson Reuters and the National Venture Capital Association. The quarter also marked the first consecutive quarter since 2004 that we’ve seen 20 or more venture-backed IPOs. More here.

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Job Listings

GE is looking for a managing director in its San Ramon, Calif., office to be “primarily responsible for sourcing, planning, and leading strategic investments and/or acquisitions on behalf of GE Software & Analytics.” To be considered, you’ll need a degree in science, tech, engineering, math or finance; at least 15 years of experience in software engineering, tech startups, corporate development, etc; and at least five years of venture or M&A experience.

Rusnano, a company owned by the government of Russia and aimed at commercializing developments in nanotechnology, is looking for a senior analyst in its Menlo Park, Calif. office. The analyst will be “responsible for the company’s institutional investment management platform” and the job requires a couple of years of “strong analytical and quantitative background.” Previous nanotech experience isn’t mandatory but preferred.

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Essential Reads

A Stanford mole (or one of Clinkle’s investors) has leaked the startup’s $25 million secret.

Assuming this is the “new normal,” Salon observes that “for those not lucky enough to have catered foodie gourmet lunches in brand-new downtown office complexes, the new normal sucks.”

What techies should know about the government shutdown.

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Detour

Need energy at the office? Skip the coffee and call your mom.

It’s official. Baseball is dominated by randomness.

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Retail Therapy

The Ralph Lauren “Polo Bear” sweater makes its return to the men’s department, though we cannot recommend wearing it on a date, in your car, at the gym, in the office, or even on a relaxing constitutional around your own home at nighttime. Trust us.

This 500-piece Breaking Bad Lego Lab is fantastic and not much more expensive than that Ninjago Lego set you bought your nephew last winter! Complete with meth-cooking outfit. Extra body parts sold separately.

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