StrictlyVC: January 27, 2014

110611_2084620_176987_imageHi, and good morning, everyone! Hope you had a nice weekend.


Top News in the A.M.

The Supreme Court has taken up six patent cases this term that, collectively, may have the patent troll business on the line.


VCs and Twitter: A Simple Relationship Turns Complicated

Over the weekend, New York Times reporter Jenna Wortham wrote of Twitter that it “seems to have reached a turning point, a phase in which its contributors have stopped trying to make the service as useful as possible for the crowd, and are instead trying to distinguish themselves from one another.”

If Wortham is becoming disillusioned with the platform, she’s hardly alone. Even venture capitalists – among Twitter’s savviest and earliest users –no longer view Twitter with the same zeal they once did, with a growing number turning away from the service for longer periods of time, if not logging off altogether.

Chris Dixon of Andreessen Horowitz talked with investor-entrepreneur Semil Shah last November about why he no longer tweets as actively as he once did. “I actually think Twitter has changed,” said Dixon, whose tweet count is nearing 15,000. “Part of it is Twitter just got more popular…For me, the golden days of Twitter were 2010 maybe, 2011, where it was a bunch of early adopter/startup people…now, everyone realizes that if you say something wrong, it’s going to be excerpted and put on Business Insider…”

On New Year’s Day, another power user, Shervin Pishevar of Sherpa Foundry, announced that after an astonishing 34,777 tweets dating back to 2007, he’d decided to “take a break” – for all of 2014. It was time to “disconnect from this overtly present present and live in the moment more,” Pishevar wrote on Medium (the newest platform from Twitter’s cofounders).

In a more recent renouncement of the platform, Paul Lee, a general partner at Chicago-based Lightbank, tweeted last Wednesday that he was “Going to be taking a break on twitter for a while (at least trying).”

When afterward, I asked Lee why, he explained that Twitter “ended up taking a lot of mindshare and creating a lot of noise in my head.” Though Lee consumes more than he publishes (over the last six years, he has sent 2,342 tweets), he finds Twitter just as distracting as someone who more actively participates in conversations.

“Imagine you’re in a meeting and you have eight people sitting on your shoulders,” he said. After logging on, even for brief periods, “It kind of felt like that. My mind was going 100 miles per hour.”

Plenty of VCs still actively use Twitter, of course. Homebrew cofounder Hunter Walk says that among the ways it helps him as an investor is his ability to share his thoughts, meet new people, and “lazyweb” questions about who is working on what.

Walker, who says he spends “toooo much” time on the platform (he has composed more than 18,000 tweets), says it doesn’t exhaust him primarily because he tries to use it “as a human being who also happens to be a VC.”

Josh Felser, a cofounder of Freestyle Capital, similarly says that his approach is not to overthink things but rather “say mostly whatever I want.” Felser (12,600 tweets) also notes that Twitter is “helpful in building my business brand” particularly given that “most entrepreneurs are on it.”

Lee acknowledges the value in Twitter that Felser sees. In fact, he says Lightbank has funded two startups that it sourced through Twitter. “So from a branding perspective – meaning branding of [Lightbank] and self-branding – it’s been really effective.”

Lee says he’s still prepared to avoid it for now. “It’s only been a few days,” he told me Friday morning. He said he was already feeling “less tied to it, less compelled to check it.” But he was also quick to call it “an experiment. I don’t want to get ahead of myself.”

In the meantime, the Twitter-fatigued might pay special attention to Marc Andreessen, someone known for the shrewd way in which he has marketed his venture firm. A big fan of “counterprogramming,” Andreessen has taken to Twitter with great relish over just the last month.

In the six years prior, he sent out two tweets.


New Fundings

Aduro BioTech, a 14-year-old, Berkeley, Calif.-based company that has developed a vaccine to treat pancreatic cancer, is raising a Series C round from Morningside Ventures and others, says VentureWire. Morningside also participated in its $19.25 million Sereis B round in 2011. The company has raised more than $33 million altogether, says Crunchbase.

LiveOps, the 13-year-old, Santa Clara, Ca.-based cloud contact center and customer service company, has raised $30 million in debt funding that comes “almost entirely” from Comerica Bank, reports Techcrunch. It’s the largest round yet for the company, which has raised $81 million to date, including from Menlo VenturesBenchmark, and IronPort Systems co-founder Scott Banister., an 11-month-old, Cambridge, Ma.-based company that’s making it possible to customize 3D products in your browser, then have them shipped to your door, has raised $400,000 in seed funding, says VentureWire. The money largely comes from individuals with ties to theMIT Media Lab.

Redmart, a 2.5-year-old, Singapore-based online grocery service has raised a $5.4 million bridge round leading up to a larger Series B, the company tells VentureBeat. The company has raised $10 million to date; it says its biggest investor is Facebook co-founder Eduardo Saverin, who moved to Singapore in 2009.

SoundCloud, a six-year-old, Berlin-based streaming audio company, has raised more than $60 million in Series D funding at a valuation of roughly $700 million, reports the WSJ. The round was led by Institutional Venture Partners with participation from the Chernin Group, the investment firm founded by former News Corp. president Peter Chernin.

TigerText, a four-year-old, Santa Monica, Ca.-based enterprise messaging service, has raised $21 million in Series B funding led by Shasta Ventures, with OrbiMed AdvisorsTELUS, and Reed Elsevier Venturesparticipating. TigerText has raised roughly $31 million to date, according to Crunchbase.


New Funds

Union Square Ventures, the 10-year-old, New York-based venture firm, has raised roughly $340 million, according to several new SEC filings. USV has raised $166 million in fresh capital for its fourth early-stage fund, and $166 million for its second “opportunities” fund, which the firm will use to provide bigger slugs of capital to those breakout companies that need it. The firm has also raised an $8.3 million side LP fund.



Achaogen, a 14-year-old, South San Francisco-based company that’s developing antibacterials to treat multi-drug resistant infections, filed an S-1on Friday to raise up to $75 million in a IPO. Its biggest shareholders include Domain Partners, which owns 18.8 percent of the company;Venrock, which owns 16.2 percent; the Wellcome Trust, which owns 14.6 percent; ARCH Venture Fund, which owns 13.2 percent; Versant Venture Capital, which owns 11.9 percent; Omega Fund, which owns 8.22 percent; and 5AM Ventures, which owns 5.6 percent.

Shares of were up 43 percent by the close of trading Friday, from their IPO price of $17. The company also joined the estimated three percent of companies that have gone public between 1996 and last year with a female CEO at the helm.

Pre-IPO stock listings are coming, it seems. Marketwatch reports that the Financial Industry Regulatory Authority has quietly approved a market for “private growth companies” that will be run jointly by Nasdaq andSharesPost. Nasdaq still needs to get approval from the SEC to launch the market, to be called Nasdaq Private Market.



Cloud Party, a 2.5-year-old, San Jose, Calif.-based gaming company specializing in virtual worlds, has been acquired by Yahoo for an undisclosed sum. The company’s CEO said the service would be shut down next month. Cloud Party had never reported any outside funding.

DeepMind, a three-year-old, London-based artificial intelligence company that’s operating in stealth mode, has been acquired by Googlereports Re/code. The company was founded by neuroscientist Demis Hassabis, who is described in online bios as child prodigy in chess. (He also seemspretty skilled at poker.) Sources tell Re/code the company had raised funding from Founders Fund and Horizons Ventures, among others. The Information says that as a result of the acquisition, Google is establishing an ethics committee, one designed “to ensure the artificial intelligence technology isn’t abused.” The Information pegs DeepMind’s purchase price at “more than $500 million.”

LinkTech Navi, a 13-year-old, Beijing-based company behind a mapping service, is being acquired by the Chinese Internet giant Tencent for $9.92 million, according to TechNode.

The assets of Tutorspree, a 2.5-year-old, New York-based company that married students with private tutors, have been acquired by the company’s much better-funded competitor, WyzAnt, based in Chicago. Tutorspree had raised $1.8 million from Sequoia CapitalLerer VenturesFounder Collective, and SV Angel, among others, but the company was shutteredlast year, reports Techcrunch, its remaining capital returned to investors. WyzAnt, meanwhile, raised $21.5 million from Accel Partners in December.



Over the weekend, in a letter to the Wall Street JournalTom Perkins, cofounder of Kleiner Perkins Caufield & Byers, compared the “progressive war on the American one percent, namely the ‘rich’” to Nazi Germany’s war on the Jews. Hours later, Kleiner wrote from its Twitter account: “Tom Perkins has not been involved in KPCB in years. We were shocked by his views expressed today in the WSJ and do not agree.” It’s doubtful Kleiner was “shocked”; Perkins routinely courts attention to suit his ends. Still, KP’s partners probably wouldn’t mind if Perkins were to travel very far away on his luxurious submarine, out of the reach of the media, forever.

Sony Pictures has acquired the rights to Lean In, the best-selling book by Facebook COO Sheryl Sandberg. The studio has given the assignment of writing the script — which will be a “narrative film” on the themes contained in the book, says Deadline Hollywood — to veteran TV writer Nell Scovell, who helped Sandberg write the book. Scovell’s past credits include “The Simpsons,” “Murphy Brown,” and “Sabrina, The Teenage Witch.” Sandberg, who reportedly became a billionaire last week, will donate her proceeds from the project to her foundation.

Snapchat cofounder Evan Spiegel on why his company remains firmly rooted in L.A.: I often talk with people about the conflicts between technology companies and content companies – I’ve found that one of the biggest issues is that frequently technology companies view movies, music, and television as information. Directors, producers, musicians, and actors view them as feelings, as expression. Not to be searched, sorted, and viewed – but experienced.”

Uber‘s staff has been intentionally wasting the time and resources of much smaller competitor, Gett, including by ordering cars from the service, then abruptly canceling them. Altogether, reports Valleywag, at least 13 employees, including the general manager of Uber’s New York office,regularly participated in the scheme.

Alisher Usmanov, Russia’s richest tycoon, has increased his control over Russia’s largest social network, VKontakte, after its founder Pavel Durovsold his 12 stake in the company to an ally of Usmanov. Learn more here.


Job Listings

OpenView Venture Partners, the Boston-based, expansion-stage venture capital fund, is looking to hire a growth strategist who will develop, manage and create content and marketing programs that raise OpenView’s profile, among other things.



CB Insights has published a list of the top most active U.S. healthcare investors of 2013. In descending order, they are: Versant VenturesNew Enterprise AssociatesDomain AssociatesPolaris PartnersOrbiMed AdvisorsSV Life SciencesMPM CapitalArch Venture Partners,Kleiner Perkins, and InterWest Partners. To see who tends to partner with whom — “the BFFs of healthcare VC,” as CB Insights puts it — read on.


Essential Reads

According to the WSJ, Apple is laying the groundwork for an expanded mobile-payments service.

Good news, bad news: According to Nielsen, online advertising grew 32 percent last year, but that’s still just 4.5 percent of advertisers’ overall spend; the bulk of it — 57.6 percent — is still going to TV.



“Mitt,” Al Gore, and our identification with presidential losers.

Highly educated, highly indebted: The lives of today’s 27-year-olds, in charts.


Retail Therapy

A theater, for your face. Coming soon, maybe.


To sign up for StrictlyVC, click here. To advertise, click here.

Filed Under:

Don’t Miss Out!

Sign up today to receive a free daily email with everything you need to start your day. Plus, keep track of the companies and personalities that will shape the industry in the months and years to come. Let StrictlyVC be your very own venture capital concierge.

StrictlyVC on Twitter