StrictlyVC: February 5, 2014

110611_2084620_176987_imageGood Wednesday morning! Quick weekly reminder: You can reach me anytime at connie[at] or on Twitter.

Top News in the A.M.

Longtime Google Ads exec Susan Wojcicki is YouTube’s new boss.

Google has reached a settlement to end the European Union’s three-year antitrust probe, after offering to display results from rival search services


Ajay Chopra of Trinity Ventures: Mine Your Portfolio Companies

ike a lot of venture capitalists, General Partner Ajay Chopra of Trinity Ventures has a number of ways to “turn down the noise” of a clamorous startup ecosystem without, hopefully, tuning out the next billion-dollar opportunity.

Chopra — who joined Trinity in 2006 after selling the company he’d cofounded, Pinnacle Systems, to Avid Technology for roughly $460 million — talked with me yesterday about some of the tactics he uses.

You recently wrote about why it’s important to turn down entrepreneurs the right way. Why spell it out?

The point was that because we turn down 99 percent of the people we meet, it makes sense to be prompt about [a no] — which many VCs are guilty of not doing — give them feedback, and be helpful to them by just pointing them in a couple of right directions. It doesn’t take that long and it really does leave a lasting impression.

How much effort can you put into the process, practically speaking?

Well, first, I think the VC business is about how do you separate the signal from the noise. VCs do it in a variety of ways. For example, if I’m only investing in digital media, I’m not looking at clean tech or healthcare deals. If I’m only looking at Series A and B deals, I’m not looking at growth-stage companies. Even still, you could spend a lot of time focusing on the wrong things, so we focus a lot of building relationships, including mining our portfolio.

Meaning what, exactly?

We talk to employees at the VP level, the director level, even the product manager level while [they’re employed by a startup we’re backing]. We get to know the management teams and we ask, “Who are your best guys?” because we want them to have a relationship with us.

That doesn’t threaten your CEOs?

Not if you do it with the CEOs’ consent. I think most CEOs who are confident company builders don’t have any issues with it. Companies with hidden agendas from their board members might, but then they usually have other issues to worry about.

I do think it’s good for product managers to be meeting with venture capitalists. And I think it’s a good retention tool for CEOs. In fact, I often get an invitation from a CEO, saying, “Hey, this person did a great job. Can you reach out to them or have coffee with them or send them an email?” Everyone knows there’s a board, and there’s a light level of touch whether you like it or not. The best CEOs use it to their advantage and to benefit their employees.

Do you take product managers out for lunch? How does it work?

We invite people in specific areas to events, like marketing people or product management people or infrastructure people or VPs of operations — people who are sometimes underserved and not recognized. We have a speaker usually, and we let the CEOs pick three top people to [send to one of these events to] award them. Recently, for example, we had [Zulily founder] Mark Vadon talk with a group about his background and career development and how to handle conflict. Hopefully, it left a subliminal impression about Trinity, so that three or five or six years from now, when these employees’ current ventures have proven successful and they’re ready to step out, they’ll think, “Let’s call Ajay; I feel comfortable with him.”

Interesting that you think these employees might themselves become founders. So you don’t subscribe to the theory that entrepreneurs are born, not made?

Not at all. Entrepreneurship isn’t about being able to hack or code or build the best [user interface] as a teenager. It’s about passion and the determination to fulfill a vision. The overwhelming indicator of the best entrepreneurs is that they’re passionate and driven by the idea that they’re chasing. I might hate the idea. I might think it’s crazy. I’ll tell someone that, too. But if they say they’re going to chase it anyway, that they aren’t going to give up, well, that’s a good entrepreneur.


New Fundings

Adar IT, a 16-year-old, Lincolnwood, Il.-based cloud IT services company that’s focused on small to medium-size businesses, has raised $2.4 million in funding from MK Capital.

Confide, a months-old, New York-based confidential messaging app designed for professionals, has raised $1.9 million in seed funding led byWGI Group. Other investors to participate in the round include Google VenturesFirst Round CapitalSV AngelLerer Ventures,CrunchFundLakestarMarker, David Tisch’s BoxGroup, Yelp CEO and co-founder Jeremy Stoppelman, Entourage creator Doug Ellin, and Access Hollywood host Billy Bush.

Datadog, a four-year-old, New York-based company behind a SaaS monitoring and data analytics platform, has raised $15 million in Series B funding led by OpenView Venture Partners. Earlier investors Index VenturesRTP VenturesAmplify PartnersIA Ventures and Contour Ventures also participated in the round. The company has raised roughly $21 million to date, shows Crunchbase.

DataRank, a three-year-old, Bentonville, Ar.-based company that helps companies track online conversations about their brands and perform other competitive analysis, has raised $1.4 million in seed funding led by New Road Ventures, with participation from FundersClub and other angel investors. The company had earlier raised money from Y Combinator.

Dataxu, a 3.5-year-old, Boston-based media management platform for digital ad campaigns, has raised roughly $10 million in new funding, according to an SEC filing. The funding brings the capital raised by the company to roughly about $55 million. Previous investors includeThomvest VenturesAtlas VentureFlybridge Capital Partners, andMenlo Ventures.

Elementum, a 2.5-year-old, Mountain View, Ca.-based mobile supply chain software provider, has raised $44 million in Series B funding fromLightspeed Venture Partners and Flextronics.

Foodpanda, a two-year-old, Berlin-based Rocket Internet-incubated take-out ordering service, has raised fresh $20 million in funding led byPhenomen Ventures. The company and its affiliate, Hellofood, have now raised nearly $50 million, including from Kinnevik of Stockholm and iMena Holdings, which partnered with Rocket Internet last fall to expand Hellofood’s Middle Eastern operations.

Foursquare, the five-year-old, New York-based mobile app company, had received a $15 million investment from Microsoft last year as part of a funding round that valued the company at more than $600 million, says a new Bloomberg report. Microsoft, said the report, is adding features to its Windows Phone software in an effort to compete with Apple iPhone and Google’s Android software.

Jivox, a 6.5-year-old, Redwood City, Ca.-based multiscreen ad tech platform, has raised $5.8 million in Series C funding led by Fortisure Ventures. New investor Shah Capital also participated in the round alongside earlier investors Diaz NesamoneyOpus Capital and Helion Advisors. The company has raised just north of $31 million to date.

Lumos Pharma, an Austin-based, early-stage biopharmaceutical company that’s aiming to treat autistic behavior and other medical problems, has raised $14 million in Series A funding co-led by Sante Ventures and New Enterprise Associates. Dow Jones has much more on the company here.

Noom, a three-year-old, New York-based company behind a popular health and wellness app, has received $7 million in Series A financing led by RRE Ventures.

OnShift, a 5.5-year-old, Cleveland, Oh.-based company that makes staff scheduling and shift management software, has raised $7 million in Series C funding led by HLM Venture Partners and earlier investors, Draper Triangle VenturesEarly Stage PartnersFifth Third CapitalGlengary LLC, and West Capital Advisors. The company has raised $13.8 million altogether, shows Crunchbase.

Primus Power, a 4.5-year-old, Hayward, Ca.-based energy-storage company, has raised $20 million in Series C funding led by Anglo American Platinum. The company has now raised around $31 altogether, including from Kleiner Perkins Caufield & Byers and Chrysalix Energy.

REGEN Energy, an 8.5-year-old, Toronto-based startup that’s turning thousands of rooftop AC units into smart, networked building and grid-responsive energy assets, has raised $7 million in Series B funding led by an unnamed “international energy company.” Earlier investors also participated in the round, including BDC Venture Capital and NGEN Partners. REGEN has raised about $15 million altogether, its CEO tells Greentech Media.

Tapingo, a two-year-old, San Francisco-based mobile shopping platform, has raised $10.5 million in Series B funding led by Khosla Ventures, with participation from existing investor Carmel Ventures. The company has raised $14 million to date.

Unitas Global, a four-year-old, L.A. based company that offers enterprise cloud service to organizations, has raised $5.7M in funding, shows an SEC filing. No non-executive directors are listed.


New Funds

Draper Fisher Jurvetson, the 29-year-old, Sand Hill Road firm, announced in a blog post yesterday that it has closed its newest early-stage venture fund, DFJ Venture XI, with $325 million. In the post, the team noted that founding members Tim Draper and John Fisher will not be investing partners in the new effort, though both “will remain on DFJ’s management committee and will be significant personal investors in our fund…” The fund is slightly smaller that its immediate predecessor, DFJ’s $350 million Fund X, closed in 2008. According to peHUB, one of its biggest LPs is the San Francisco Employees’ Retirement System, which committed $25 million to the effort.

Drive Capital, the two-year-old, Columbus, Oh.-based early-stage firm of former Sequoia Capital partners Mark Kvamme and Chris Olsen, has closed its inaugural fund with $250 million. Reuters has more on the vehicle, which will invest in tech, healthcare, and consumer businesses. In November, StrictlyVC had reported on a bit of controversy surrounding Drive Capital’s fundraising efforts.

Expa Capital, a months-old, San Francisco-based investment vehicle founded by serial entrepreneur Garrett Camp, is raising up to $75 million, according to an SEC filing first flagged by TechCrunch. Camp disclosed his plans for Expa last May, telling TechCrunch that it will be structured like a holding company, as with ObviousBetaworks, and Science, among others outfits that help to build companies simultaneously. Camp famously founded the online discovery service StumbleUponUber CEO Travis Kalanick has also credited Camp with dreaming up Uber, which Camp cofounded.

Luminari Capital, a year-old, Menlo Park, Ca.-based firm focused on digital media, is raising $40 million for its first fund, according to an SEC filing. Luminari was founded by Daniel Leff, who’d previously spent more than five years as an investor with Globespan Capital Partners. A source tells StrictlyVC that the fund has already held a first close and that its LPs include British Sky Broadcasting Group, which is also an investor in the TV streaming platform Roku, on whose board Leff sits.



BlueKite, a two-year-old, Miami, Fla.-based company that helps facilitate cross-border payments, has been acquired by the publicly traded digital money transfer company Xoom Corp. for approximately $15 million in cash and equity. BlueKite had raised $1.5 million in seed funding from the Miami-based investment firm PeopleFund.

Crescendo Bioscience, a 14-year-old, South San Francisco, Ca.-based company, has been acquired by Myriad Genetics, a Salt Lake City, Ut.-based diagnostics company. The price tag is $270 million in cash, minus a $25 million loan Myriad made to Crescendo in 2011, reports Xconomy. Crescendo makes a molecular diagnostic test that measures the level of disease activity in patients with rheumatoid arthritis. It has raised roughly $100 million over the years, including from Aeris Capital AGSkyline VenturesSafeguard ScientificMohr Davidow Ventures and Kleiner Perkins Caufield & Byers.



Ethan Beard, who ran developer relations and product marketing for Facebook’s platform, has joined Greylock Partners as an entrepreneur-in-residence. Beard, who left Facebook after its May 2012 IPO, tells Bloomberg that his “goal it start a company. This gives me the ability to have a pulse on what Greylock is seeing, to step back and have a broader perspective.”

Dan Clancy, a longtime Google executive and former NASA Ames research director, has joined the local social networking startup Nextdooras its VP of engineering. Re/code has more here.

Kent Goldman, a VC who has spent the last five years at the early-stage venture firm First Round Capital (and several years at Yahoo before that), is launching his own investment fund. Goldman isn’t sharing many details yet, including the name of his new venture, but in a blog post yesterday, First Round founder Josh Kopelman said he plans to “make a significant personal investment” in Goldman’s new fund.

Roy J.E.M. Raymann, a sleep research expert, has been hired away from Philips Research by Apple in a move believed tied to Apple’s highly anticipated iWatch. The outfit 9to5mac has the story.

Ted Schlein, the veteran managing partner of Kleiner Perkinsspoke about cyber attacks during a Wall Street Journal conference yesterday. Said Schlein, “I have been in the security business for three decades and it only gets worse. I don’t think it is a battle you win. You hope to get to a draw, so [the attacks] move on to someone else.”

Google Chairman Eric Schmidt has lots of new reasons to celebrate, observes USA Today. In a new filing, Google disclosed that it’s awarding Schmidt stock valued at $100 million, plus a discretionary cash bonus of $6 million. The company characterized the windfall as “recognition of (Schmidt’s) contributions to Google’s performance in the last fiscal year.” Forbes pegged Schmidt’s wealth at around $8.3 billion last year. Google shares closed at $1,138.16 yesterday.

Brian Wilcove has joined the East Palo Alto, Ca.-based venture firm Artiman Ventures as a managing director. Wilcove was previously a VC at Sofinnova Ventures and TeleSoft Partners; before becoming an investor, he cofounded Virtela, a networking company that was acquired by NTT. Artiman focuses on “startups with no identifiable competitors” says Silicon Valley Business Journal.


Job Listings

Newly public is looking for a VP of corporate development in Waltham, Mass. Apply here.



Registration for the MIT Technology Review Digital Summit, held on June 9 and 10 in San Francisco, is now open. More here.



Last year saw 206 percent more $10 million+ size Series A deals than 2009, reports CB Insights. Andreessen Horowitz and Accel Partnershave led the most outsize Series A rounds over the past five years; here’s a quick look at their co-conspirators.

Separately: Using data collected from the 1996 to 2013 proxy seasons, the law firm Fenwick & West has tracked the number of women serving on boards and executive management teams of companies in the Silicon Valley 150 index, and its findings suggest the Valley is trailing behind its broader corporate peers when it comes to gender.

Among Fenwick’s findings: that last year, 56 percent of Silicon Valley 150 companies (which average 8,500 employees) had at least female director. Comparatively, 98 percent of companies in the S&P 100 (which average 170,000 employees each) had at least one female director.

In related news, Zendesk, the 6.5-year-old, San Francisco-based maker of cloud-based customer service software that’s expected to go public this year, announced three new board members yesterday, all of whom happen to be women: Caryn Marooney, vice president of technology communications at Facebook; Betsey Nelson, former CFO of Macromedia; and former Amazon general counsel Michelle Wilson.


Essential Reads

srael is a cybersecurity powerhouse, and that’s partly thanks to investor-entrepreneur Shlomo Kramer. “He is my first call in terms of bouncing ideas and brainstorming in terms of security,” Greylock‘s Asheem Chandna tells Bloomberg.



Son, it’s time we talk about where startups come from.

Hilarious journalist tweets from Sochi: “For those of you asking, when there’s no lobby in your hotel, you go to the owner’s bedroom to check in.”

Looking to buy a sprawling, unfinished getaway in Bel Air with your IPO riches? You may be in luck. Private equity tycoon Tom Gores is selling hissemi-completed 29,000-square-foot mega mansion for $50 million. (On the upside, that’s less than he spent to acquire it in 2009).


Retail Therapy

The Mariachi Ski Suit. We wants one. We needs one. (Why should Mexican Olympian Hubertus von Hohenlohe have all the fun?)

Sometimes it’s better not to execute on a particular idea.


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