StrictlyVC: July 10, 2014

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Top News in the A.M.

Chinese hackers in March broke into the computer networks of the U.S. government agency that houses the personal information of all federal employees, reports the New York Times.

Faced with growing opposition from the tech industry, the Obama Administration has ditched its plans to name pharmaceutical executive Phil Johnson as head of the U.S. Patent and Trademark Office.

The potato salad guy has now raised roughly $44,900 on Kickstarter. That had better be some good potato salad.


A Small New Fund with a Game-Changing Idea

Unlike venture capitalists, who get to place dozens of bets in search of a winner, founders typically have one shot at winning the startup game.

Kent Goldman, a former partner with First Round Capital, thinks he has struck on a way to improve those odds. Today, Goldman takes the wraps off a new, San Francisco-based, $30 million seed fund called Upside Partnership that will give every founding team in its portfolio a piece of its carry, making them effectively Upside’s partners.

That’s right. Goldman will take what he characterizes as a standard management fee. But he’ll be sharing an amount of carry that he expects will reach “significantly into the double digits,” albeit “less than half” of Upside’s overall upside.

If a venture capitalist somewhere just spit out his coffee, it’s understandable. Like it or not, Goldman may have just changed the game for everyone. What founder wouldn’t want a piece of a venture portfolio at no additional cost? And what better motivation for founders to help one another?

VCs like to talk with entrepreneurs about what’s fair. Goldman’s model — where founders will receive carry on a sliding scale, based on Upside’s initial check size — doesn’t get much fairer.

Other details about the fund: Unlike the many specialized seed funds springing into existence these days, Goldman says he went in the opposite direction, with plans to focus very generally on “purpose-built founders who can explain why this is the right time in their life to pursue their passion.”

Certainly, if Goldman is predisposed toward certain sectors, you wouldn’t know if from his portfolio at First Round, where his varied investments included the hotel booking application company HotelTonight; the real time analytics platform MemSQL; and Airware, a platform that helps other companies develop commercial drones.

Goldman says he plans to write relatively small checks, too, staying in the “$300,000 range” when possible. For one thing, he thinks there’s a dearth of VCs who are willing or able to meaningfully help startups without more money riding on those companies. He also suggests that getting into the best deals might be easier if he’s not asking founders or other investors to “make room for me.”

As for fundraising, Goldman, who is the fund’s sole general partner for now, says it took roughly four months, with most of the capital coming from institutional investors. In fact, Goldman says that less than $2 million came from individuals, including First Round founder Josh Kopelman, with whom Goldman remains close.

It begs the question of why Goldman left a plum job with First Round in the first place.

“Venture tends to not be a terribly entrepreneurial industry,” Goldman says. But he had his big idea, and he couldn’t let it go.

“I view this like any founder who leaves a great company to try something on their own,” he says. Particularly when that company’s mission involves meeting with entrepreneurs every day, it’s “hard not to catch the bug yourself.”


New Fundings

AdhereTech, a 2.5-year-old, New York-based healthcare technology company that makes patented smart pill bottles that remind patients to take their medication, has raised $1.75 million in Series A funding from undisclosed investors. The company has raised $2.4 million to date, shows Crunchbase.

Altierre, an 11-year-old, San Jose, Ca.-based provider of dynamic pricing technology to retailers, has raised a new round of more than $21 million co-led by new investor Stratim Capital and D.E. Shaw. Earlier investors ATA VenturesDuPont Capital ManagementLabrador Ventures and Kinetic Ventures also participated in the round.

Avere Systems, a six-year-old, Pittsburgh, Pa.-based company that provides hybrid cloud-based storage to enterprises, has raised $20 million in Series D funding led by Western Digital Capital, with participation from previous investors Lightspeed Venture PartnersMenlo VenturesNorwest Venture Partners and Tenaya Capital. The company has raised $72 million to date.

BirdDog, a 15-year-old, Urbandale, Ia.-based company that provides recruitment and application tracking software for companies in the construction and skilled trade industries, has raised $4 million in Series A funding led by Des Moines, Ia.-based venture firm Next Level Ventures. Earlier investor Bridgepoint Investment Partners, also based in Des Moines, also participated in the round.

Comfy, a year-old, Austin, Tx.-based company that matches college students with off-campus housing, has raised $600,000 in seed funding led by Dominion Ventures, with participation from Austin Ventures and numerous angel investors.

NewVoiceMedia, a 14-year-old, London-based company that makes cloud-based contact center software, has raised $50 million in Series E funding led by Technology Crossover Ventures. Earlier investors who also participated in the round include Bessemer Venture Partners,Eden VenturesHighland Capital Partners EuropeNotion Capital and The company has raised $113 million to date, shows Crunchbase.

Syapse, a six-year-old, Palo Alto, Ca.-based data platform that integrates complex genomic and clinical data with care pathways and medical knowledge bases to give healthcare workers actionable insights, has raised $10 million in Series B funding led by Safeguard ScientificsThe Social+Capital Partnership, the company’s Series A investor, also participated in the round, which brings Syapse’s total funding to $14.6 million.

Wayin, a three-year-old, Denver-based company whose software gathers social media postings and displays it in real time on its clients’ sites, mobile apps, or, in the case of sports teams, scoreboards, has raised $13.1 million. (We’d first flagged this one for you last month, when an SEC filing showed it had raised $12.1 million.) U.S. Venture Partners led the Series C round, with Wilson Sonsini Goodrich and Rosati, TV producer Burt Sugarman, and Discovery Land Company CEO Mike Meldman participating. Wayin was cofounded by Sun Microsystems cofounder and CEO Scott McNealy.

WeSpeke, a four-year-old, Pittsburgh, Pa.-based online platform for language learning and practice and cultural exchange, has raised $3 million in Series B funding from undisclosed investors. The company, cofounded by the director of the Language Technologies Institute at Carnegie Mellon University, had previously raised $3.2 million over two earlier rounds, shows Crunchbase.


New Funds

137 Ventures, a 3.5-year-old, San Francisco-based firm that lends cash to startup founders and other shareholders in exchange for shares in their companies, has closed on its second fund with, yes, $137 million. The company raised its first, $50 million, fund in 2011. TechCrunch has much more here.

That London-based Google Ventures unit we’ve been writing about is officially a go. According to a blog post by managing director Bill Maris, Google is entrusting a team of five with $100 million to start. Those partners include Google Europe executive Eze Vidra, entrepreneur Tom Hulme, angel investor Peter Read, UK head Avid Larizadeh, and current Google Ventures partner MG Siegler, who will reportedly remain in London temporarily to help his new colleagues get up and running. VentureBeat has more here.

J.P. Morgan Chase has so far raised $797 million for its second digital growth fund, shows an SEC filing. The banking giant closed its first digital growth fund with $1.2 billion in 2011. TwitterFacebookJawbone and, more recently, the e-commerce plays Zalando and Namshi, are among the many companies on which the firm has made big bets in recent years.



Neebula, a four-year-old, New York-based software company whose products automate the discovery, mapping and monitoring of IT-enabled enterprise services, has been acquired by publicly traded ServiceNow for $100 million. The company, which was founded in Israel, had raised an undisclosed amount of money from Genesis Partners and Pitgano Venture Capital, says VentureWire.



Greetings from Sun Valley, where security is tight.

Abingworth, the international investment group dedicated to life sciences and healthcare, has promoted Ken Haas and Vin Miles to partners. Both are based in the U.S., where they focus on everything from early-stage to PIPE deals.

During the first six months of 2014, Marc Andreessen tweeted 21,783 times, an average of five tweets per hour, every hour. Quartz has analyzed the whole archive here.

In another sign that the Winklevoss Bitcoin exchange traded fund is making slow but steady headway, the latest amendment to its S-1 filing shows that it will use COIN as its ticker symbol. (Mais bien sûr.) ETF Daily has more here.


Job Listings

Amazon is looking for business development managers in both Delhi and Mumbai to make friends with local VCs, accelerators and incubators.

Intuit is looking for a corporate development manager in Mountain View, Ca.

And The Juilliard School in New York is looking for a director of business development to help it develop a suite of digital products and educational programs.


Essential Reads

Documents leaked to TechCrunch from inside Yelp allege that Google is manipulating its search results to favor Google+ content over Yelp content.

Tinder insiders give TechCrunch their side of the story.



The TSA’s Instagram feed.

Freestyling through Manila.

Underwater photos of dogs fetching balls.


Retail Therapy

If you like historic military vehicles and live in the Bay Area, you might check out this upcoming tour. (H/T: InsideHook.)

The only white jeans you need, we are told.


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