• StrictlyVC: October 23, 2013

    110611_2084620_176987_imageTop News in the A.M.

    The pressure builds on Kathleen Sebelius to resign as President Obama’s health secretary in the wake of the troubled rollout of the country’s new online insurance exchange.

    Mark Zuckerberg’s CEO compensation last year, most of it from exercised shares, was a robust $2.28 billion.

    —–

    Michael Chasen’s New “Billion-Dollar Idea”

    Michael Chasen speaks a mile a minute, and maybe there’s a reason why. He’s a serial entrepreneur who has discovered his next calling – providing location-based connections for young, mobile users. It’s a well-worn story at this point, but Chasen may just be the one to make money in this space.

    If Chasen’s name sounds familiar, it’s likely because of Blackboard, an education software company that he cofounded with his college roommate in 1997. Blackboard went public in 2004 before it was acquired in 2011 by Providence Equity Partners for $1.64 billion.

    Needless to say, Chasen never has to work again. But while visiting colleges during his Blackboard days, he realized his latest idea – connecting people who are in close proximity to each other through their phones – might be an even bigger opportunity than Blackboard. As a result, he quickly put together a 20-person company and, in June, closed on $12.5 million from NEA, Grotech Ventures, and a long line of celebrity entrepreneur-investors, including Steve Case, Ted Leonsis, and Dave Morin. He could have raised more. (“We actually had over $20 million in interest for the $12 million round,” Chasen tells me at at a San Francisco coffee shop. “We had investors we said no to, and we had to scale people back.”)

    Investors were presumably taken with Chasen’s track record. But Chasen also argues that his company, SocialRadar, which is based in Washington, D.C., is a billion-dollar idea. Its objective: to cross-reference the location beacons in our pockets – our smartphones – with the now two billion social profiles online, to create real-time information about the people around us, whether they’re 300 feet or 50 miles away.

    “With SocialRadar,” says Chasen, “you can walk into a room, and we’ll tell you there are 10 people here who you know: five coworkers, three people you went to college with, and two people who live on your street. Beyond that, we’ll tell you that your one college friend recently got his MBA and another was recently married.” Adds Chasen, “Right now, people might think, Why do I need to know who’s around? But it’s about having that information at your fingertips. You might not act on it, but maybe you will. It all depends on the context.”

    SocialRadar is still in beta, with plans to launch by year end. (Chasen says the team is still working on all kinds of features, including around privacy, so that if you want to see who is around you but don’t want to be seen, you can list yourself as “anonymous” or use the app completely invisibly.)

    Once it scales, SocialRadar intends to make money through directed commerce, by presenting location-aware offers and the like. But Chasen says the focus is very much on growing the business first  — something he thinks he can do quickly by leveraging location information from Facebook, Instagram, Twitter, LinkedIn, and Google to show users who’s around, regardless of whether those acquaintances already have the SocialRadar app.

    The strategy isn’t without huge risks. The location-based landscape is filled with the bones of entrepreneurs who’ve tried to make money off seemingly useful services and failed. More, some of these services might object to SocialRadar monitoring their users’ data. If Facebook, in particular – the veritable 900-pound gorilla in this space – decides that it doesn’t want to play nice, SocialRadar could find itself in a very tight position.

    Then again, Chasen has proven that he can make money in a tough space. The number of investors who’ve made money in education is minuscule, and yet he succeeded twice, first in taking the company public, then in selling it to a major private equity firm. Chasen also seems realistic, the product of his many years as an entrepreneur, no doubt. As he puts it: “Just like mapping software has fundamentally influenced the way that people use technology and get around, this technology has the same potential. Five to 10 years from now, everyone will have this technology and use it on a daily basis — whether or not it’s SocialRadar.”

    cpc

    New Fundings

    Bromium, a three-year-old, Cupertino, Calif.-based data security company, has raised $40 million led by Meritech Capital Partners, with existing investors Andreessen HorowitzIgnition PartnersHighland Capital Partners, and Intel Capital participating. Bromium analyzes malware for IT administrators after an attack; it has raised roughly $75 million to date.

    CoolaData, a year-old, Tel Aviv-based company behind a behavioral analytics service, has raised $7.4 million in a Series A funding from Greylock Partners Israel and Carmel Ventures.

    Easy Taxi, a three-year-old, Sao Paulo-based, Uber-like mobile application has raised $7 million from iMENA Holding and Rocket Internet, a six-year-old Berlin-based e-commerce incubator that was founded by the renowned Samwer brothers and which raised $500 million in June. The round for Easy Taxi is just the latest in a recent succession, reports TechCrunch, which notes that in July, Easy Taxi raised $10 million from Africa Internet Holding (AIH), a joint venture between Rocket Internet and AIH’s 35% owner Millicom, and that the two investors invested $15 million in Easy Taxi in June through another joint venture: Latin American Internet Holding, to help give Easy Taxi runway to grow in Latin America.

    Handybook, an 18-month-old, Cambridge, Mass.-based start-up that invites users to book preapproved cleaners and repairmen, has raised $10 million in Series A funding, led by General Catalyst Partners and Highland Capital Partners. The two firms invested $2 million in Handybook a year ago.

    Monteris Medical, a 14-year-old company headquartered in Winnipeg, Manitoba, has raised $13.3 million in equity and debt financing. BDC Venture Capital Healthcare Fund led the equity round, with SWMF Life Science Fund and other unnamed investors filling out the rest of the equity financing. Oxford Finance provided the debt financing. Monteris has developed a system that uses lasers, catheters, MRI machines and proprietary software to help surgeons treat brain cancer. Altogether, it has raised $34.5 million in funding.

    OneClass, a three-year-old, Toronto-based company that’s been creating an interactive library for college-level content, has raised  $1.6 million in Series A funding from the private equity firm SAIF Partners. Existing investors, including Real Ventures, also participated.

    Outbrain, a seven-year-old, New York-based company known for creating viral advertising links, has raised $35 million in a round that was led by HarbourVest and included Carmel VenturesIndex Ventures, and Gemini Israel VenturesGlenRock IsraelRhodium and Lightspeed Venture Partners also participated in the financing. The company has raised $64 million to date.

    Perpetuuiti TechnoSoft Services, a 2.5-year-old, Mumbai-based discovery recovery management firm, has raised an undisclosed amount of funding from Intel Capital, which manages a $250 million India-focused pool of capital. Others of Intel’s India-based investments include SnapdealHealthkart, and Yatra Online. Peretuuiti, along with SkySQL (see below) are among 16 new investments around the world that Intel Capital revealed yesterday. The entire list can be found here found here.

    Prism Skylabs, a two-year-old, San Francisco-based video analytics startup, has raised $15 million in Series B funding led by Intel Capital, which was joined by Triangle PeakPresidio VenturesData Collective and Expa. The company has raised $25 million to date. Previous investors include TomorrowVenturesSV AngelData CollectiveAndreessen Horowitz and CrunchFund.

    Pronutria, a two-year-old, Cambridge, Mass.-based company, raised $10.8 million in Series A funding from Flagship Ventures. Founded by Flagship VenturesLabs, the company, which has been operating in stealth mode for the past two years, describes itself as a “revolutionary platform for identifying protein nutrients from within the human diet that have potent pharmacological effects.”

    SkySQL, a three-year-old, Espoo, Finland-based open source software company, has raised $20 million led by Intel Capital, with California Technology VenturesFinnish Industry InvestmentOpen Ocean Capital and Spintop Private Partners, participating.

    Zen Planner, an eight-year-old, Denver-based maker of business management software for the health and fitness community, has raised $10 million in Series A funding from the growth equity firm Mainsail Partners.

    —–

    IPOs

    500.com, an online sports-lottery operator in Shenzhen, China, has filed for a $150 million IPO in the U.S. The company is largely owned by executives. Those institutions with a sizable stake include Clear Treasure Group Limited, which owns 10.4 percent of the company; DeLite Limited, which owns 12.4 percent; Brothers Union International Limited, which owns 11.3 percent, and Smart Mega Holding Limited, which owns 11 percent. Sequoia Capital is also mentioned on the listing, though its holdings aren’t listed.

    Moelis & Co, the seven-year-old, New York-based boutique investment bank, is reportedly mulling an IPO.

    Sungy Mobile Ltd., a Guangzhou, China-based mobile applications maker, has filed to raise $80 million in a U.S. IPO. Among its shareholders are Freedom First Holdings, which owns 30.1 percent of the company, IDG Ventures, which owns 28.7 percent, and JAFCO, which owns 9.6 percent.

    Twitter updated its S-1 yesterday, revealing that it has obtained a $1 billion credit facility this month. The move is reminiscent of Facebook and Zynga, two other companies that tapped the debt market in advance of their IPOs.

    —–

    Happenings

    The FundingPost is featuring a venture and angel investor event this afternoon in New York. You can learn more here.

    The Venture Atlanta conference also kicks off today. Dick Kramlich of NEA and John Balen are among the event’s featured speakers. Details are here.

    If you’re in L.A. you might want to check out PandoDaily‘s monthly “Fireside Chat,” featuring investor Mark Suster. The program begins at 6 pm PST.

    A two-day “predictive analytics” conference is also getting underway in London today. Click here for more information.

    —–

    People

    Kim Kardashian and Kanye West became engaged(!!!) at AT&T Park in San Francisco Monday night, and their friends were there to see it, including Ben HorowitzMark and Ali Pincus, and Girls Gone Wild founder Joe Francis.

    Barry McCarthy, who spent 11 years as the CFO of Netflix, beginning in 1999, has joined Clinkle, the San Francisco-based payments company that raised the “largest seed round in Silicon Valley history” and which is expected to formally launch its service next year. McCarthy, who has been an advisor for the past few years at Technology Crossover Ventures, is Clinkle’s new COO.

    Tina Sharkey, the former CEO of BabyCenter, is joining Sherpa Foundry as CEO. Sherpa Foundry is a 10-month-old venture co-founded by investors Shervin Pishevar and Scott Stanford. AllThingsD has the lowdown.

    —–

    Job Listings

    GrowthCap, a New York-based deal network that looks to pair private growth-stage companies with institutional investors, is looking for a VP of business development to help grow the company’s relationships in the PE and VC communities. The ideal candidate has a background in financial services.

    —–

    Essential Reads

    Everything you need to know about yesterday’s Apple event.

    Facebook is still struggling to find the line between violent content for the sake of raising awareness and violent content that simply celebrates violence.

    —–

    Detours

    From a fun New York Times profile of Deadspin video editor, Tim Burke. The 35-year-old is “known among sports journalists for his ability to capture the moment – whether as a still, a video clip or in his favored format, a GIF – better, faster, more frequently and from more sports events than just about anyone. How he does it is a matter of wonder.”

    Fatter animals are evidently translating into new business opportunities. Think pet gyms, pet pools — even fat camp for dogs.

    A brief, visual history of beautiful coffeemakers, in FastCo.

    —–

    Retail Therapy

    We love this: An instant photo lab for those iPhone pictures you just have to convert into film.

    This $45 million Falcon 5X private jet is none too shabby (we especially like its oversize windows).

    This may be the perfect app for the person who not only doesn’t mow his own lawn but can’t be troubled to turn on the spigot outside to water it.

    ——

    Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking hereIf you’re interested in advertising in our email newsletter, please click here. To sign up for the newsletter, visit strictlyvc.com.

     

  • Michael Chasen’s New “Billion-Dollar Idea”

    SocialRadarMichael Chasen speaks a mile a minute, and maybe there’s a reason why. He’s a serial entrepreneur who has discovered his next calling – providing location-based connections for young, mobile users. It’s a well-worn story at this point, but Chasen may just be the one to make money in this space.

    If Chasen’s name sounds familiar, it’s likely because of Blackboard, an education software company that he cofounded with his college roommate in 1997. Blackboard went public in 2004 before it was acquired in 2011 by Providence Equity Partners for $1.64 billion.

    Needless to say, Chasen never has to work again. But while visiting colleges during his Blackboard days, he realized his latest idea – connecting people who are in close proximity to each other through their phones – might be an even bigger opportunity than Blackboard. As a result, he quickly put together a 20-person company and, in June, closed on $12.5 million from NEA, Grotech Ventures, and a long line of celebrity entrepreneur-investors, including Steve Case, Ted Leonsis, and Dave Morin. He could have raised more. (“We actually had over $20 million in interest for the $12 million round,” Chasen tells me at at a San Francisco coffee shop. “We had investors we said no to, and we had to scale people back.”)

    Investors were presumably taken with Chasen’s track record. But Chasen also argues that his company, SocialRadar, which is based in Washington, D.C., is a billion-dollar idea. Its objective: to cross-reference the location beacons in our pockets – our smartphones – with the now two billion social profiles online, to create real-time information about the people around us, whether they’re 300 feet or 50 miles away.

    “With SocialRadar,” says Chasen, “you can walk into a room, and we’ll tell you there are 10 people here who you know: five coworkers, three people you went to college with, and two people who live on your street. Beyond that, we’ll tell you that your one college friend recently got his MBA and another was recently married.” Adds Chasen, “Right now, people might think, Why do I need to know who’s around? But it’s about having that information at your fingertips. You might not act on it, but maybe you will. It all depends on the context.”

    SocialRadar is still in beta, with plans to launch by year end. (Chasen says the team is still working on all kinds of features, including around privacy, so that if you want to see who is around you but don’t want to be seen, you can list yourself as “anonymous” or use the app completely invisibly.)

    Once it scales, SocialRadar intends to make money through directed commerce, by presenting location-aware offers and the like. But Chasen says the focus is very much on growing the business first  — something he thinks he can do quickly by leveraging location information from Facebook, Instagram, Twitter, LinkedIn, and Google to show users who’s around, regardless of whether those acquaintances already have the SocialRadar app.

    The strategy isn’t without huge risks. The location-based landscape is filled with the bones of entrepreneurs who’ve tried to make money off seemingly useful services and failed. More, some of these services might object to SocialRadar monitoring their users’ data. If Facebook, in particular – the veritable 900-pound gorilla in this space – decides that it doesn’t want to play nice, SocialRadar could find itself in a very tight position.

    Then again, Chasen has proven that he can make money in a tough space. The number of investors who’ve made money in education is minuscule, and yet he succeeded twice, first in taking the company public, then in selling it to a major private equity firm. Chasen also seems realistic, the product of his many years as an entrepreneur, no doubt. As he puts it: “Just like mapping software has fundamentally influenced the way that people use technology and get around, this technology has the same potential. Five to 10 years from now, everyone will have this technology and use it on a daily basis — whether or not it’s SocialRadar.”

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

  • StrictlyVC: October 22, 2013

    110611_2084620_176987_imageTop News in the A.M.

    Microsoft is testing prototypes for its own Web-connected eyewear.

    Marc Andreessen: Stories About Silicon Valley “Crack Me Up”

    Silicon Valley has been receiving a lot of unfavorable media attention in recent months, from Valleywag to New York magazine to the New Yorker. Last week, during a sit-down with Marc Andreessen at the Sand Hill Road offices of his firm, Andreessen Horowitz, we discussed some of that coverage, and what he makes of it. Part of our conversation, lightly edited for length, follows. For more of our chat, visit StrictlyVC.

    There’s a lot of hand-wringing in the media lately over whether or not Silicon Valley takes into mind the broader economy. Do you think some of those criticisms are valid?

    The stories crack me up. There’s sort of two criticisms. One is that Silicon Valley is the new elite, the new one percent, the new oligarchy, and that all the billionaires don’t give a shit about society and [welcome a] Mad Max dystopian wasteland of no jobs [as] technology takes everything over.

    The other argument is that technology produces nothing of value; it’s all just Snapchat apps so 14-year-old girls can send selfies to each other. I have a hard time reconciling the two arguments.

    What of the argument that the Valley is building technologies that are primarily of value to a subset of people who can afford to use them?

    That I don’t agree with. I think that’s almost just Uber, or the early-delivery services.

    If you’re a journalist and come to Silicon Valley and you want to find three startups [whose services] only 25-year-olds and single people with discretionary income are ever going to use, you can do that, congratulations. If you want to come to Silicon Valley and find companies that are really going to open up access to transportation or education or financial services to people who haven’t had access to those things before, you can also do that.

    These stories are very well-written and they’re entertaining, but they’re typically written by someone outside the Valley who wants to reach a certain conclusion to make them and their readers – in my view – feel better. I think it’s very reassuring, especially to people in New York right now, to think the Valley is just a bunch of kids farting around. But it’s only one slice.

    Another widespread criticism is that tech entrepreneurs don’t give back enough. As a philanthropist, what do you think?

    With tech — and you see this with a lot of these new entrepreneurs — they’re 25, 30, 35 years old, and they’re working to the limit of their physical capability. And from the outside, these companies look like they’re huge successes. On the inside, when you’re running one of these things, it always feels like you’re on the verge of failure; it always feels like it’s so close to slipping away. And people are quitting and competitors are attacking and the press is writing all these nasty articles about you, and you’re kind of on the ragged edge all the time. So to try and figure out how to find the time to intelligently allocate philanthropic capital, like, it just does not compute. It’s a timing issue.

    Many founders I know, including a lot of really young founders, fully plan to give the vast majority away. They just plan to do it when they have time to do it properly. You could make the reasonable argument that the world would be better off if they gave the money away faster; it just begs the question of how, which is a harder question to answer. Even Warren Buffett couldn’t figure out how to do it without just giving it to Bill Gates. Maybe the answer is just give all the money to Bill Gates!

    cpc

    New Fundings

    Blue Rooster, a 13-year-old, Seattle-based enterprise software company focused on interactive design and development, has raised $3 million from Fujitsu subsidiary PFU Limited. The money is part of a larger investment that has yet to be completed, reports TechCrunch.

    Comprimato, a young, Prague-based company behind a newer, faster video compression technology, has received 200,000 euros in seed funding from the Czech seed fund Credo Ventures and corporate venture arm of Czech tech company Y Soft. Comprimato is a spin-off of CESNET, the Prague-based research institute.

    Docurated, a two-year-old, New York-based startup whose cloud-based software helps companies organize their data in a more easily searchable way, has raised $3.75 million from Rogers Venture Partners, a nearly two-year-old, $150 million venture firm in Palo Alto. The company had previously raised $1.6 million in seed funding.

    Kona Medical, a four-year-old, Bellevue, Wash.-based company that develops treatments for hypertension, has raised  $10 million in Series D financing from Morningside Group, an investment firm with a big presence in China. Just last year, Kona raised $30 million in Series C funding led by an unnamed “large-cap medical technology company,” which was joined in the financing by existing investors Essex WoodlandsDomain AssociatesMorgenthaler Ventures and BioStar Ventures.

    Soylent, a young San Francisco-based startup whose signature drink ostensibly addresses every human nutritional need, has raised $1.5 million in seed funding from investors, including Lerer Ventures and Andreessen Horowitz. (It’s the kind of “fringe” investment that AH will still back at the seed stage.) Other investors in the company include investors Alexis OhanianHarj TaggarGarry Tan, and Jack and Sam Altman.

    Sqrrl, an 18-month-old, Cambridge, Mass.-based company behind a scalable, NoSQL database that’s used by the NSA, has raised $5.2 million in Series A financing from Atlas Venture and Matrix Partners. The same two firms had provided Sqrrl with $2 million in seed funding in August 2012. TechCrunch has an interesting piece on the company here.

    Superpedestrian, a four-year-old, Boston-based company that was spun of MIT, has raised $2.1 million in Series A funding from Spark Capital and Tumblr founder David Karp. The company produces a very neat wheel technology that can turn any bike into an electric hybrid. Boston Business Journal has much more here.

    Telly, a four-year-old, San Francisco-based startup has raised $3.4 million, according to an SEC document spied yesterday by VentureBeat. Telly’s video platform shows users videos based on what their friends have enjoyed, and the company has previously raised $6.5 million, including from Azure CapitalDraper Fisher Juvetson, and Siemer Ventures. More here.

    Unbound, a young, London-based online platform that invites authors to pitch their ideas and visitors to choose which get written, has raised $1.82 million in seed financing from DFJ EspritCambridge Angels Group, and Forward Investment Partners.

    United Capital Financial Partners, a Newport Beach, Calif.-based company with offices around the country, has raised $38 million in growth financing led by Sageview Capital, which was joined by Bessemer Venture Partners and Grail Partners. United Capital Financial runs a fast-growing registered investment advisory (RIA) firm that, since 2005, has grown through dozens of acquisitions of smaller RIA firms. BVP and Grail have participated in previous rounds of financing for the company.

    —–

    IPOs

    Varonis Systems, an eight-year-old, New York-based data company that helps organizations manage and analyze their unstructured data, has filed to go public, in an offering expected to raise around $100 million. The company plans to list on Nasdaq. Among its biggest shareholders are Accel Partners, which owns 25.6 percent of the company; Evergreen Venture Partners, which owns 23.1 percent; Pitango Venture Capital, which owns 17.1 percent, and JPMorgan, which owns 9.1 percent.

    Renaissance Capital observes that “with printed jet engines, cakes and even organs on the horizon, excitement for 3D printing is climbing quickly. The latest public 3D printing player” — VoxelJet, a maker of large industrial-use systems that counts numerous German VCs as principal shareholders — “had the second best debut of the year for a US IPO, jumping 121.5%” last week. More from Renaissance about that offering and others here.

    —–

    Exits

    FlexyCorp, a Rennes, France-based company behind an Android performance boosting app called DroidBooster, has been acquired by Google for undisclosed terms, report both TechCrunch and France’s L’Expansion.

    Tellabs, a 38-year-old, Naperville Ill.-based  telecom and optical networking equipment maker that went public in 1980, is being acquired by the private equity firm Marlin Equity Partners for $891 million in cash, a 4.3 percent premium over its October 18 closing price. As columnist-investor Om Malik notes, the amount is “less than [the] quarterly sales it logged during the heyday of telecom” during the go-go ’90s.

    —–

    Happenings

    Apple‘s highly anticipated event — in which new iPads, iMacs and more are expected to be featured —  is happening today in downtown San Francisco. Plan accordingly if you work in SOMA. And if you’d rather not catch every detail over Twitter, you might be interested in signing up for CNet’s live event blog.

    What? In Abu Dhabi, you say? Then you might want to tune into Nokia’s Innovation Reinvented event, where half a dozen new devices are expected to be unveiled. The U.K.-based gadget site Pocket-lint is already out there and evidently sweating to death in order to provide readers up-to-the-minute details, so if you can’t make it, just check out its feed here.

    —–

    People

    Renowned tech columnist David Pogue is ditching the New York Times for Yahoo.

    Lane MacDonald becomes the head of private equity investments at Harvard Management Company in December. In April, longtime PE head Peter Dolan left the position. MacDonald, who attended Harvard College, joined the unit in 2008. Reuters has much more here.

    —–

    Job Listings

    Lighter Capital, a 3.5-year-old, Seattle-based firm that loans tech startups anywhere from $50,000 to $500,000 in exchange for a percentage of their future revenues, is looking for an associate who doesn’t mind being a jack of all trades.  (Because the firm is small, you’d be helping on the investment side, as well as assisting with marketing, biz dev, and even software development input and testing.) Requirements include an undergraduate degree and two to three years in investment banking or private equity/venture capital.

    —–

    Essential Reads

    Unaccredited investors may finally get the go-ahead to fund startups during an open meeting at the SEC tomorrow.

    Most VCs do just fine, but they aren’t “insanely rich,” according to these calculations.

    —–

    Detours

    Can we, as a nation, take one more minute of Keith Olbermann? GQ investigates.

    Fully 86 percent of college students are texting throughout their classes, reports a new study.

    These powerful ads use real google searches to show the scope of sexism worldwide.

    Thirty Hollywood stars who started out in horror movies! Mmmwhahaha.

    —–

    Retail Therapy

    Have $48 million to spend on a New York penthouse? We’ve got just the place for you.

    Witness: A muscle shirt with built-in padding to make you look buff. It is not a joke. Do not, under any circumstances, buy this alarming product. If you do not heed this advice, at least do not, under any circumstances, wear it on a date with someone who might be inclined to unbutton your shirt unless you secretly hate this person.

    ——-

    Addendum: StrictlyVC was told by several readers that the hand-sewn penny loafers we featured yesterday were awful. One reader specifically asked that we “do a man-check on some of this stuff first.” Point taken.

    ——

    Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking hereIf you’re interested in advertising in our email newsletter, please click here. To sign up for the newsletter, visit strictlyvc.com.

  • Marc Andreessen: Stories About Silicon Valley “Crack Me Up”

    006_mark_andreessenSilicon Valley has been receiving a lot of unfavorable media attention in recent months, from Valleywag to New York Magazine to The New Yorker. Last week, during a sit-down with Marc Andreessen at the Sand Hill Road offices of his firm, Andreessen Horowitz, we discussed some of that coverage, and what he makes of it. Part of our conversation, lightly edited for length, follows. 

    There’s a lot of hand-wringing in the media lately over whether or not Silicon Valley takes into mind the broader economy. Do you think some of those criticisms are valid?

    The stories crack me up. There’s sort of two criticisms. One is that Silicon Valley is the new elite, the new one percent, the new oligarchy, and that all the billionaires don’t give a shit about society and [welcome a] Mad Max dystopian wasteland of no jobs [as] technology takes everything over.

    The other argument is that technology produces nothing of value; it’s all just Snapchat apps so 14-year-old girls can send selfies to each other. I have a hard time reconciling the two arguments.

    What of the argument that the Valley is building technologies that are primarily of value to a subset of people who can afford to use them?

    That I don’t agree with. I think that’s almost just Uber, or the early-delivery services.

    If you’re a journalist and come to Silicon Valley and you want to find three startups [whose services] only 25-year-olds and single people with discretionary income are ever going to use, you can do that, congratulations. If you want to come to Silicon Valley and find companies that are really going to open up access to transportation or education or financial services to people who haven’t had access to those things before, you can also do that.

    These stories are very well-written and they’re entertaining, but they’re typically written by someone outside the Valley who wants to reach a certain conclusion to make them and their readers – in my view – feel better. I think it’s very reassuring, especially to people in New York right now, to think the Valley is just a bunch of kids farting around. But it’s only one slice.

    Another widespread criticism is that tech entrepreneurs don’t give back enough. As a philanthropist, what do you think?

    With tech — and you see this with a lot of these new entrepreneurs — they’re 25, 30, 35 years old, and they’re working to the limit of their physical capability. And from the outside, these companies look like they’re huge successes. On the inside, when you’re running one of these things, it always feels like you’re on the verge of failure; it always feels like it’s so close to slipping away. And people are quitting and competitors are attacking and the press is writing all these nasty articles about you, and you’re kind of on the ragged edge all the time. So to try and figure out how to find the time to intelligently allocate philanthropic capital, like, it just does not compute. It’s a timing issue.

    Many founders I know, including a lot of really young founders, fully plan to give the vast majority away. They just plan to do it when they have time to do it properly. You could make the reasonable argument that the world would be better off if they gave the money away faster; it just begs the question of how, which is a harder question to answer. Even Warren Buffett couldn’t figure out how to do it without just giving it to Bill Gates. Maybe the answer is just give all the money to Bill Gates!

    Photo courtesy of BusinessWeek.

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  • StrictlyVC: October 21, 2013

    Top News in the A.M.

    Tablet shipments are expected to grow a whopping 53 percent this year.

    Apple debuts its first iPhone 5S TV spot.

    Oops. An identity theft service that sold Social Security and drivers license numbers purchased much of its data from Experian.

    —–

    Andreessen Horowitz Backs Out of Seed Investing

    There’s been a lot of back and forth in recent weeks about whether or not the venture firm Andreessen Horowitz is dialing back on certain types of Series A investments. But cofounder Marc Andreessen suggests a bigger shift is the firm’s decision to get out of seed investing, except when presented with “fringe” opportunities. 

    Andreessen explained the firm’s thinking during a sit-down last week at his Sand Hill Road office. Our conversation — which we’ll run more of this week — has been edited slightly for clarity.

    You think companies have to compete against themselves to stay innovative. How is Andreessen Horowitz continuing to innovate?

    Probably the biggest change is that we’re pulling back significantly on the number of seed investments we’re making. We’ve had this policy, which all [venture] investors have, which is that if we invest in the [Series A or later] stage, we’re not going to invest in a competitive company, because that’s very damaging to an entrepreneur. For seed, we’ve always been explicit that if we’re putting in $50,000 to $100,000 [we can invest in competing companies, too].

    Which can still create signaling issues, of course. Isn’t that why you’d launched a scouting program, using entrepreneurs to quietly seek out seed deals on your behalf?

    We tried for a while to minimize [signaling damage] through the scout program; that was one potential layer of interaction that we thought would help. We also tried briefly to have this A16z seed brand and under that program, we could make multiple bets in one category.

    Nobody can really do seed investing with a conflict policy because it’s all so uncertain at that point. You don’t have any idea what these companies are going to be doing in a year, much less whether you’re investing in the right one. And you’re putting very small amounts of money to work, so if you can only invest in one [startup per] category, you could never make many investments.

    So what changed?

    What we tell everybody is we don’t take the conflict policy with seed investments. But [entrepreneurs] don’t necessarily hear us, and it causes them problems anyway and makes them feel bad.

    Also, the outside world doesn’t necessarily understand the difference. So we think there are more and more entrepreneurs at the seed stage who don’t want to talk with us because they think we’re already invested in a competitor. They think we’re conflicted out of the category. And they don’t differentiate between the seed and venture category. So we’re backing off of the number of seed investments we make basically to prevent that problem from getting worse.

    What will happen instead?

    One, we’re going to work even more closely with a bunch of the top-tier seed firms to be an even better source of deal flow for them. There’s also stuff we’ll do with seed companies to help them out without actually having investment stakes. We’ll kind of do favors, build a relationship [with them].

    What we will back is fringe, where you couldn’t even conceive that there will be a competitor. So something that looks really nuts becomes very attractive for that program, which, arguably, is the best thing to invest in at the seed stage, because the whole point of the seed investments is to learn. ‘Here’s a brand new idea: Is it going to work. Is it not going to work? Is this person for real or are they crazy?’ You kind of want to figure that out before you write the big check.

    cpc

    New Fundings

    Everest, a year-old, San Francisco-based startup behind a mobile app that reminds users of their personal goals, is raising a $500,000 round of funding, according to an SEC filing. TechCrunch reported earlier this year that the company has already received some financial support from investor Peter Thiel; according to the Form D, Everest, listed as EVRST, has already raised $50,000.

    Gremln, a four-year-old, St. Louis, Missouri-based startup that makes social media management software, has collected roughly half of a $962,000 round it’s raising, according to an SEC filing. Gremln raised $700,000 late last year from a St. Louis accelerator program called Capital Innovators.

    Insightra Medical, a 12-year-old, Irvine, Calif.-based company whose products serve the hernia repair market, has closed an undisclosed amount of Series C funding from Baird Capital and Tekla Capital Management. Others of its previous investors include Manipal GroupSamos Investments, and Vision Sciences.

    K2 Learning, a nascent, Bangalore-based education startup with both software and hardware components (it plans to make specialized tablets), has raised $1.3 million in angel funding from Radheshyam Agarwal, founder and director of Calcutta Tube India.

    M-DAQ, a three-year-old, Singapore-based financial tech startup whose platform allows users to price and trade exchange-traded products in more than one currency, has raised $11.7 million in Series B funding led by GSR Ventures and Citi Ventures. With its previous rounds, the company’s total capital comes to roughly $24 million.

    Panorama Education, a three-yeard-old, Boston-based  data analytics company designed to give school districts information about their students and teachers, has raised $4 million in Series A funding from Startup:EducationA-Grade InvestmentsYale UniversitySoftech VC and Google Ventures.

    Panoramic Power, a four-year-old company that’s headquartered in Kfar Saba, Israel, and makes real-time energy management software for commercial businesses, has raised $8 million in funding. The round was led by Marker, a year-old fund launched by Rick Scanlon, cofounder of Crescent Group. Other participants in the financing included Greylock PartnersIsrael Cleantech Ventures FundsClal Energy, and Qualcomm Ventures.

    OKPanda, a new, New York-based startup that produces digital products to help users learn English, has raised $1.4 million, including from Resolute VenturesInnovation EndeavorsKapor Capital and 500 Startups. You can learn more here.

    Swift Biosciences, a four-year-old, Ann Arbor, Mi.-based company whose technologies examine disease-related genes and help enable tools for managing cancer, has closed $7 million in Series B financing. Fletcher Spaght Ventures led the round with participation from Renaissance Venture Capital Fund, the Mercury FundMichigan Accelerator Fund and several Michigan-based individual investors. The company had raised a $3 million Series A in August 2010.

    TapStream, an 18-month-old, British Columbia company that makes app marketing software, has raised about $680,000 in seed funding led by BDC Venture Capital, which was joined by unnamed individual investors.

    Teads, a two-year-old Paris-based company that has developed a platform for video advertising, has raised $5.15 million in Series A funding from Partech Ventures and Elaia Partners.

    —–

    New Funds

    The investing team at Felicis Ventures in Palo Alto, Calif., has raised a separate, $7 million fund called Clover Fund, according to an SEC filing, which lists Felicis Ventures’ founder Aydin Senkut along with his partners Renata Streit Quintini and Sundeep Peechu.

    Turn/River Capital, a San Francisco-based, tech-focused firm is targeting $2 million for a side venture fund, according to a new SEC filing. Turn/River was founded by Dominic Ang, who held junior roles at Plumtree Software, Advent International, and Vector Capital before taking over an apparel site in 2008 and later selling it in 2010 to the women’s media network Popsugar for undisclosed terms. Turn/River registered paperworkwith the SEC last year to raise a separate $10 million.

    Versant Venture Capital, a 14-year-old Sand Hill Road venture firm, is looking to raise $250 million for its fifth fund, judging by a new SEC filing. Versant raised its last fund, a $500 million pool, in 2008. Robin Praeger, the firm’s CFO, is listed on the form, along with just six of the 10 managing directors who are featured at its site: Brad BolzonSam ColellaRoss JaffeWilliam LinkKirk Nielsen, and Charles Warden. Versant invests in medical devices, biopharmaceuticals and other life science companies.

    —–

    IPOs

    Nimble Storage, a five-year-old, San Jose-based data storage company has filed to go public.The number of shares to be sold and the price range for the proposed offering have not yet been determined, but Goldman Sachs and Morgan Stanley have been selected as book-running managers for the offering. The company has raised more than $80 million to date, with early investors Accel Partners, Sequoia Capital, and Lightspeed Ventures Partners poised to see the biggest returns. Accel and Sequoia each own 20.9 percent of the company; Lightspeed owns 15.8 percent of its shares.

    Paylocity, a 16-year-old, Arlington Heights, Ill.-based online payroll and human resources software company, has picked Bank of America CorpDeutsche Bank and William Blair to lead an IPO for the company that could come next year, sources tell Reuters. The offering could reportedly raise around $100 million. The company raised $9.5 million from Adams Street Ventures in 2008.

    TetraLogic Pharmaceuticals, a 10-year-old, Malvern, Pa.-based biopharmaceutical company whose drug is being tested for treating colorectal cancer, ovarian cancer, and blood cancers, filed to go public on Friday, for an offering of up to $103.5 million. The company hasn’t yet generated any product revenue. HealthCare VenturesNovitas CapitalQuaker BioVenturesLatterell Venture PartnersClarus Life SciencesHatteras Venture Partners, and Pfizer each own 5 percent or more of the company’s outstanding shares, says its filing.

    —–

    Happenings

    The Variety Entertainment and Technology Summit kicks off today at the Marina Del Ray Ritz Carlton in Southern California. Here are some details about the lineup.

    The Wolfram Technology Conference gets underway in Champaign, Ill., today. More details here.

    —–

    People

    Dennis Crowley, founder and CEO of Foursquare, is a happily married man. He was wed this past Saturday.

    Edward Nadel has joined Lowenstein Sandler‘s Investment Management Group as Senior Counsel. He was previously general counsel and COO at Star Mountain Capital and, prior to that, was the Director of Alternative Investments at Credit Suisse.

    —–

    Job Listings

    Google is looking for a Corporate Development Associate to work at its headquarters in Mountain View, Calif. The role involves working collaboratively across the company’s legal, finance and people operations to find and evaluate acquisition and investment opportunities. To apply, you need at least two years of relevant work experience in corporate development, venture capital, private equity or investment banking. An MBA or other advanced degree is preferred.

    —–

    Essential Reads

    Does Twitter have a patent problem?

    Sure, Android is open — except for al the good parts.

    The “road show” for star running back Arian Foster initial public offering has gotten off to a lousy start.

    —–

    Detours

    Google’s latest terms and conditions are harder to comprehend than both Beowulf and War and Peace, say scientific researchers at the University of Nottingham.

    Kings of the Dot.Com Bubble: Where are they now?

    The man who forgot everything.

    We couldn’t stop reading this excerpt from Mike Tyson’s autobiography.

    Kai Rysdall of Marketplace is also a pretty fascinating guy.

    —–

    Retail Therapy

    When it comes to cool, we think this $1.2 million, 42-foot-long J Craft Torpedo Boat, made in Stockholm, is very hard to beat. Supple leather, handcrafted cabinetry, a handsome Nardi steering wheel. Drool.

    Sunglasses by Persol. For outings on your J Craft Torpedo Boat.

    You’ll also need shoes (yes, also for the the boat). You could go with a nice pair of top siders, but as long as you’re already channeling Dickie Greenleaf, we kind of like this pair of hand-sewn penny loafers.

    ——-

    Please feel free to send us any and all story suggestions (anonymous or otherwise) by clicking hereIf you’re interested in advertising in our email newsletter, please click here. To sign up for the newsletter, visit strictlyvc.com.

  • Andreessen Horowitz Backs Out of Seed Investing

    A16zThere’s been a lot of back and forth in recent weeks about whether or not the venture firm Andreessen Horowitz is dialing back on certain types of Series A investments. But cofounder Marc Andreessen suggests a bigger shift is the firm’s decision to get out of seed investing, except when presented with “fringe” opportunities. 

    Andreessen explained the firm’s thinking during a sit-down last week at his Sand Hill Road office. Our conversation — which we’ll run more of this week — has been edited slightly for clarity.

    You think companies have to compete against themselves to stay innovative. How is Andreessen Horowitz continuing to innovate?

    Probably the biggest change is that we’re pulling back significantly on the number of seed investments we’re making. We’ve had this policy, which all [venture] investors have, which is that if we invest in the [Series A or later] stage, we’re not going to invest in a competitive company, because that’s very damaging to an entrepreneur. For seed, we’ve always been explicit that if we’re putting in $50,000 to $100,000 [we can invest in competing companies, too].

    Which can still create signaling issues, of course. Isn’t that why you’d launched a scouting program, using entrepreneurs to quietly seek out seed deals on your behalf?

    We tried for a while to minimize [signaling damage] through the scout program; that was one potential layer of interaction that we thought would help. We also tried briefly to have this A16z seed brand and under that program, we could make multiple bets in one category.

    Nobody can really do seed investing with a conflict policy because it’s all so uncertain at that point. You don’t have any idea what these companies are going to be doing in a year, much less whether you’re investing in the right one. And you’re putting very small amounts of money to work, so if you can only invest in one [startup per] category, you could never make many investments.

    So what changed?

    What we tell everybody is we don’t take the conflict policy with seed investments. But [entrepreneurs] don’t necessarily hear us, and it causes them problems anyway and makes them feel bad.

    Also, the outside world doesn’t necessarily understand the difference. So we think there are more and more entrepreneurs at the seed stage who don’t want to talk with us because they think we’re already invested in a competitor. They think we’re conflicted out of the category. And they don’t differentiate between the seed and venture category. So we’re backing off of the number of seed investments we make basically to prevent that problem from getting worse.

    What will happen instead?

    One, we’re going to work even more closely with a bunch of the top-tier seed firms to be an even better source of deal flow for them. There’s also stuff we’ll do with seed companies to help them out without actually having investment stakes. We’ll kind of do favors, build a relationship [with them].

    What we will back is fringe, where you couldn’t even conceive that there will be a competitor. So something that looks really nuts becomes very attractive for that program, which, arguably, is the best thing to invest in at the seed stage, because the whole point of the seed investments is to learn. ‘Here’s a brand new idea: Is it going to work. Is it not going to work? Is this person for real or are they crazy?’ You kind of want to figure that out before you write the big check.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

  • StrictlyVC: October 18, 2013

    110611_2084620_176987_imageTop News in the A.M.

    Google bounces back from a disappointing second quarter.

    Growth in China is picking up.

    And, if you live in the Bay Area, be warned: BART workers are now on strike.

    Marc Andreessen: We’ve “Kicked Around” Doing a Hedge Fund, Too

    This week, I headed to Sand Hill Road to sit down with venture capitalist Marc Andreessen of Andreessen Horowitz, who is expert in keeping the media on its toes. His willingness to engage with the press – which has probably generated more public interest in venture capital than ever existed previously – is meant to crush the competition. As he told me years ago in a separate sit-down, “We like counter-programming. If there are three networks showing cop drama shows on Thursday at 9 pm, then what you want to do is put on a comedy.”

    Next week, I’ll feature excerpts from our hour-long chat in which Andreessen touched on other ways Andreessen Horowitz is trying to out-innovate its venture peers, so be sure to tune in. In the meantime, here are two quick snippets from our conversation. In the first, Andreessen and I chat briefly about Twitter, a company that will make Andreessen money both personally and professionally. (Andreessen was among Twitter’s earliest individual investors, participating in the company’s $5 million Series A. As a firm, Andreessen Horowitz elbowed its way into Twitter in early 2011 by purchasing $80 million worth of secondary shares; Twitter was valued at roughly $3.7 billion at the time.)

    Andreessen Horowitz prides itself on being fairly transparent. Yet you’ve tweeted twice – once, more than six years ago, to write “Twittering,” and about three years later to add, “I’m back – did anything happen while I was gone?” Why don’t you use it?

    [Laughs.] I don’t know that I even have a good reason for it. I was a very active blogger at one point. I’m actually very active on Hacker News. I was very active on Quora for a while. So I just kind of bounce around, do different things.

    At this point, at this firm, it’s more interesting for the other people to become more well-known, rather than me becoming more well-known. So it’s not a big priority for me to elevate my own brand. Plus, I’ve always thought it’s kind of funny.

    Funny in what way?

    [Laughs.] I don’t know. It’s just really funny. I was one of the first investors. And then I tweeted. And then I didn’t tweet. [And 900 days later], I tweeted again.

    You have something like 18,000 people following you, waiting for your next tweet.

    18,000 people. Two tweets. [Laughs again.] It’s just kind of funny.

    In this next snippet, Andreessen shares that his firm has more recently contemplated starting a hedge fund.

    You’re managing $2.7 billion at this point, but it’s been a couple of years since you raised your last fund. Will we see a new fund in 2014, and might we see a $2 billion or $3 billion fund?

    [We’ll probably raise a new fund] next year. [As for that range], I don’t think so. We’ve kicked around a couple of ideas. We’ve kicked around doing something on the public side like a hedge fund, but we’re not going to do it.

    Why contemplate it?

    First of all, there are public companies we greatly admire…that we feel are undervalued or misunderstood. Also, in the venture fund, we’re trying to go long in the future, and so the other side of that would be to go short in the past, or to short the people who are not long in the future. So if we’re doing e-commerce in a category and think there’s a retailer that will suffer as a consequence of e-commerce becoming bigger, there’s another trade you could do on the hedge fund side if you’re private.

    But…

    There are two really big issues with a firm like ours doing anything public. One, we think the insider trading risk is just off the charts. I saw that Mark Cuban just got off for the Mamma.com trade, and I’m very happy for him, but it’s a good illustration of how dangerous an environment it is for people who are kind of in the middle of things to take stock positions right now. There are just tons of prosecutions – the whole SEC thing – there’s just tons of scrutiny.

    The other issue is we have this whole corporate briefing program, where you have 1,200 management teams from big companies coming through here every year and we run these big conferences. We just held out big CIO/CMO conference last week, with 150 top CIOs [and] CMOs, and it’s an amazing program and they’re really open with us about what their challenges are and what they’re working on and trying to do, and so, if we started to short their stocks…[laughs]…right? We’d basically blow that program up. So we decided we can’t do a hedge fund.”

    ContentCtrlBanner_250x300

    New Fundings

    Accela, a 14-year-old, San Ramon, Calif.-based company that sells enterprise software to federal, state, and local government agencies — including the cities of San Francisco and New York — has raised $40 million in funding led by the Bregal Sagemont, a New York-based growth equity fund.

    Anaqua, a nine-year-old, Boston-based that helps law firms and the like better manage the intellectual property assets of their clients, has raised $25 million in funding led by Bessemer Venture Partners. The funding comes just months after Anaqua raised a $100 million round from Insight Venture Partners.

    Bambeco, a four-year-old, Baltimore-based maker of environmentally friendly home décor and furniture, has raised $4.6 million in equity, rights and securities, according to an SEC filing. In addition to the company’s founders, Thanasis Delistathis of New Atlantic Ventures is listed on the filing.

    Biodesy, a 13-year-old, Burlingame, Calif.-based company focused on protein structure monitoring, has raised $15 million in Series A financing. Investors included 5AM VenturesPfizer Venture Investments and Roche Venture Fund.

    Breathometer, a year-old, Burlingame, Calif.-based company that makes a smartphone breathalyzer app, has closed on $1.54 million in seed funding from Structure Capital VC and Dillon Hill Capital, as well as all five investors on the TV show “Shark Tank,” including Mark Cuban.

    Chukong, one of China’s largest mobile game developers, has raised $50 million led by the Chinese private equity fund New Horizon Capital. The company has raised $83 million to date, including from GGV CapitalSequoia CapitalSteamboat Ventures and Northern Light.

    Luxa, a three-year-old, Tokyo-based startup that manages a members-only discount e-commerce platform, has raised 330 million yen ($3.3 million) from KDDI Open Innovation Fund, a fund operated by the Japanese telcommunications company KDDI. The company had previously raised a round of funding from JAFCO.

    Minted, six-year-old, San Francisco-based online marketplace for independent design and art, has raised $41 million in Series C funding, led by Technology Crossover VenturesAllen & Company and existing investor Benchmark Capital also participated in the round, along with numerous individuals, including Yahoo CEO Marissa Mayer and Yelp CEO Jeremy Stoppelman. Minted has raised $49 million altogether.

    Mode, a months-old company that’s building an online repository for data science work, has raised a $550,000 seed round led by Yammer founder David Sacks, who was joined by other former and current Yammer executives. Mode’s CEO, Derek Steer, had worked at Yammer until August of this year.

    MyBuys, a seven-year-old, San Mateo, Calif.-based company whose software aims to helps its retail customers improve their marketing effectiveness, has closed on a $4.5 million subordinated venture loan from NXT Capital‘s Venture Finance Group. The company has raised $33.8 million in equity to date, including from Lightspeed Venture Partners and Palomar Ventures.

    ParStream, a five-year-old, Cologne, Germany-based big data analytics platform company, has raised $8 million in Series B funding led by Khosla Ventures. The company had raised a $5.6 million Series A round a year ago from Khosla Ventures, Baker CapitalData CollectiveCrunchFund, and Tola Capital.

    SolarVista Media, an outdoor billboards company based in Beijing, has raised an undislosed amount of Series D funding led by Nokia Growth PartnersChina Ease Management LimitedNorthern Light VCTuspark Ventures and FnH also participated in the funding.

    TextPower, a young, San Juan Capistrano, Calif.-based company focused on improving text messaging for enterprise alerts and security authentication, has closed a $525,000 Series A financing round. Investors included Tech Coast Angel’s ACE Fund and other, Orange County-based angel investors.

    Viridis Learning, a four-year-old, New York City-based company behind an online training and hiring platform, has received an undisclosed amount of funding from Comcast VenturesULU VenturesExpansion Venture CapitalCNF Investments and Dauk/Wagner Investments.

    Wilocity, a six-year-old, Caesarea, Israel-based wireless chipset developer, has raised $35 million in funding led by Vintage Investment Partners and Jerusalem Global Ventures. Three years ago, the company raised a $20 million round from Benchmark CapitalQualcomm AtherosTallwood Venture Capital and Sequoia Capital, all of which reportedly participated in Wilocity’s new funding.

    —–

    New Funds

    Data Elite, a new Silicon Valley-based venture lab and fund, was unveiled yesterday. The outfit will provide startups that are focusing on big data with three months of workspace, mentorship, and $50,000 for roughly 6 percent of the company. It will look to fund between five and ten companies, and it’s backed by Social+Capital PartnershipAndreessen HorowitzFormation8, investor Ron Conway and former Amazon executive Anand Rajaraman, among others. Reuters has much more here.

    Female Founders Fund may be New York’s latest micro fund. The outfit is raising $5 million — and has secured $1.5 million toward that end — according to an SEC filing that lists just one executive: Anu Duggal. The serial entrepreneur has founded, among other things, the niche, flash sales site Exclusively.In, which raised $16 million in venture funding from Tiger Capital and Accel Partners and sold to Myntra, a large Indian e-commerce business last November. Terms of the deal were not disclosed, but on Duggal’s LinkedIn profile, she says the sale returned 7x for the company’s angel investors.

    —–

    Exits

    Compendium, a seven-year-old, Indianapolis-based content marketing platform, has been acquired by Oracle. Terms of the deal were not disclosed. Compendium had raised just $2.8 million in angel funding. TechCrunch has much more here.

    The popular torrent site isoHunt, is shutting down as part of a settlement with Hollywood’s major movie studios, which had sued isoHunt in 2006 and on whose side the 9th Circuit Court of Appeals sided earlier this year, finding that the site was promoting copyright infringement.

    PinReach, an outfit that was focused on providing Pinterest analytics and influence metrics to customers, has been acquired an Oklahoma City-based competitor called Tailwind. Terms of the purchase were not disclosed, but the deals marks the second time that PinReach is being acquired. According to news reports, PinReach was acquired last year by the New York-based marketing and technology firm Nervewire, which has since decided to focus its energy on its core business of digital marketing and public relations.

    —–

    Data

    The NVCA and PricewaterhouseCoopers published some new data this morning that shows VC activity is up 12 percent on a dollar basis and 5 percent on a deal basis, compared with the second quarter of this year, when $7 billion was invested in 956 deals. Software received the most funding, garnering more than $3 billion ($3.6 billion to be exact) for the first time in 12 years. The SJ Merc has more here.

    —–

    People

    Mike Hopkins is Hulu‘s new CEO. Hopkins was formerly Fox Networks’ distribution chief. Andy Forssell, who has been Hulu’s interim CEO since March, is leaving the company with Hopkins’s appointment.

    Jessica Steel, a former Pandora executive, has joined the venture-backed babysitting marketplace UrbanSitter as president; she also joins the company’s board. Steel had long served as Pandora’s executive VP of biz dev; she stepped down last year.

    J.J.Hirschle, a former Google ad exec, has just been hired as Twitter‘s head of retail.

    R.J. Pittman is EBay‘s new chief product officer of its eBay Marketplaces business, the company announced yesterday. Pittman joins the company from Apple, where, since April 2010, he has been responsible for the design, product management and development of its worldwide e-commerce platform.

    —–

    Job Listings

    The Walt Disney Company is looking for a senior manager of business strategy to join the company’s mobile app/digital product team. The position is responsible for (among other things), identifying and optimizing revenue opportunities, developing, managing and executing marketing and promotional plans, and identifying and executing new business development opportunities. Seven years or more in a business strategy or development role are required; an MBA is preferred.

    —–

    Essential Reads

    Last week, we asked: Does Jeff Bezos need a wingman? Turns out he cycles through them systematically, according to this interesting Bloomberg account.

    It’s contagious! People who know entrepreneurs are much more likely to become entrepreneurs, finds a new survey by Kauffman Foundation fellow Paul Kedrosky.

    Behind the VC numbers: Higher prices, less control.

    —–

    Detours

    New research finds the presence of security cameras prompts people in a crowd to help those in need.

    It’s looking like a mystery bidder who spent $866,000 on the James Bond Lotus submarine from “The Spy Who Loved Me” was James Bond-like entrepreneur Elon Musk.

    Homes in several San Francisco neighborhoods are up a stunning 51 percent(!) over this period last year.

    Here’s why it’s important to teach kids to relax and just daydream.

    —–

    Retail Therapy

    Nothing screams, “I’m single,” quite like an aquarium bed.

    GoPlates. They might look absurd, but do you know of a better way to eat, drink, and obsessively scan your phone while standing?

    ——-

    Corrections: Yesterday’s StrictlyVC inadvertently stated that Stitch Fix, an online shopping platform, had raised $12 billion; it wishes it raised $12 billion. (Kidding.) It raised $12 million, and we apologize for the error. StrictlyVC needs to catch up on some sleep this weekend.

  • Marc Andreessen: We’ve “Kicked Around” Doing a Hedge Fund, Too

    marc-andreessenThis week, I headed to Sand Hill Road to sit down with venture capitalist Marc Andreessen of Andreessen Horowitz, who is expert in keeping the media on its toes. His willingness to engage with the press – which has probably generated more public interest in venture capital than ever existed previously – is meant to crush the competition. As he told me years ago in a separate sit-down, “We like counter-programming. If there are three networks showing cop drama shows on Thursday at 9 pm, then what you want to do is put on a comedy.”

    Next week, I’ll feature excerpts from our hour-long chat in which Andreessen touched on other ways Andreessen Horowitz is trying to out-innovate its venture peers, so be sure to tune in. In the meantime, here are two quick snippets from our conversation. In the first, Andreessen and I chat briefly about Twitter, a company that will make Andreessen money both personally and professionally. (Andreessen was among Twitter’s earliest individual investors, participating in the company’s $5 million Series A. As a firm, Andreessen Horowitz elbowed its way into Twitter in early 2011 by purchasing $80 million worth of secondary shares; Twitter was valued at roughly $3.7 billion at the time.)

    Andreessen Horowitz prides itself on being fairly transparent. Yet you’ve tweeted twice – once, more than six years ago, to write “Twittering,” and about three years later to add, “I’m back – did anything happen while I was gone?” Why don’t you use it?

    [Laughs.] I don’t know that I even have a good reason for it. I was a very active blogger at one point. I’m actually very active on Hacker News. I was very active on Quora for a while. So I just kind of bounce around, do different things.

    At this point, at this firm, it’s more interesting for the other people to become more well-known, rather than me becoming more well-known. So it’s not a big priority for me to elevate my own brand. Plus, I’ve always thought it’s kind of funny.

    Funny in what way?

    [Laughs.] I don’t know. It’s just really funny. I was one of the first investors. And then I tweeted. And then I didn’t tweet. [And 900 days later], I tweeted again.

    You have something like 18,000 people following you, waiting for your next tweet.

    18,000 people. Two tweets. [Laughs again.] It’s just kind of funny.

    In this next snippet, Andreessen shares that his firm has more recently contemplated starting a hedge fund.

    You’re managing $2.7 billion at this point, but it’s been a couple of years since you raised your last fund. Will we see a new fund in 2014, and might we see a $2 billion or $3 billion fund?

    [We’ll probably raise a new fund] next year. [As for that range], I don’t think so. We’ve kicked around a couple of ideas. We’ve kicked around doing something on the public side like a hedge fund, but we’re not going to do it.

    Why contemplate it?

    First of all, there are public companies we greatly admire…that we feel are undervalued or misunderstood. Also, in the venture fund, we’re trying to go long in the future, and so the other side of that would be to go short in the past, or to short the people who are not long in the future. So if we’re doing e-commerce in a category and think there’s a retailer that will suffer as a consequence of e-commerce becoming bigger, there’s another trade you could do on the hedge fund side if you’re private.

    But…

    There are two really big issues with a firm like ours doing anything public. One, we think the insider trading risk is just off the charts. I saw that Mark Cuban just got off for the Mamma.com trade, and I’m very happy for him, but it’s a good illustration of how dangerous an environment it is for people who are kind of in the middle of things to take stock positions right now. There are just tons of prosecutions – the whole SEC thing – there’s just tons of scrutiny.

    The other issue is we have this whole corporate briefing program, where you have 1,200 management teams from big companies coming through here every year and we run these big conferences. We just held our big CIO/CMO conference last week, with 150 top CIOs [and] CMOs, and it’s an amazing program and they’re really open with us about what their challenges are and what they’re working on and trying to do, and so, if we started to short their stocks…[laughs]…right? We’d basically blow that program up. So we decided we can’t do a hedge fund.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

  • Can an ‘Airbnb’ of Outdoor Gear Take Off?

    spinlister (1)Everyone wants to be the Airbnb of something. Spinlister is among them. Launched with much fanfare last year as a bike-sharing marketplace, the platform failed to gain traction, its owners ultimately deciding to sell the business to one of their earliest investors, Brazilian businessman Marcelo Loureiro. Despite Spinlister’s lack of momentum, Loureiro isn’t fundamentally altering the business. Instead, he shut it down and relaunched it with an eye towards renting many more types of outdoor equipment. And he recently raised a $1.65 million seed round from friends and family to help the process along.

    The question remains whether enough people want to rent their outdoor goods. Yesterday, I chatted briefly with Loureiro about why they should, and what he hopes to do about it.

    Your business seems very hard to scale. Is that fair?

    We need to connect with the right audiences first. Originally, we were just connecting with the tech community, and a lot of bikes got listed, but not a lot of users joined. Now, we’re targeting more hard-core cyclists, and while we’re not seeing exponential growth, it’s solid and constant.

    When are you broadening out Spinlister’s offerings?

    In mid-December, when we have enough inventory, we’re planning on opening up the platform for other sports equipment, starting with skis and snowboards. Afterwards, we’ll add skateboards and surfboards and camping gear and kayaks — anything you have in your garage that you aren’t using. A lot of cyclists have snowboards or skis, and a lot of snowboarders have bikes, but we weren’t talking to them. There’s a whole community that’s just sitting on gear and we’re now very focused on creating awareness [within that community].

    People rent their bikes for $20 a day on average. How much of that fee do you collect?

    I take 30 percent: 12.5 percent on the renter’s side as a service fee as 17.5 percent as a lister’s fee. It sounds like a lot, but it’s what we need right now to keep the lights on. We do have people making [real] money renting bikes. If you have a good bike or bikes in a good location, you’re going to get the business.

    Where are you seeing the most traction? 

    We have bikes listed all over the world. But right now, we have the most inventory in San Francisco and New York, with 350 bikes in New York and 500 bikes in SF.

    Is that more or fewer bikes than people are trying to rent in those cities?

    We have more demand than supply. My fulfillment [rate] is around 35 to 40 percent of requests because I don’t have the inventory, or sometimes the bike’s owner isn’t available in time or the bike is broken.

    Other complicating factors must include drop-off and pick-up, along with theft, despite that you cover damages. Why are you so convinced of this model?

    Access trumps ownership; it’s where things are headed. You used to own CDs; now you access Spotify whenever you want. I think similarly, people will access, versus own, their gear. I talked recently with [big wave surfer] Laird Hamilton, and he [suggested that with Spinlister] everyone who lives by the beach who has a few boards can have a business without having a shop. It’s the same with people who own multiple bikes.

    Down the road, there are lots of opportunities to [capitalize] on the knowledge we’re amassing about what kind of equipment people like to use. That kind of data could be very valuable to brands, for example, who could also test new gear within the platform.

    It’s early. This year has been about building and fixing a lot of stuff; in 2014, we go after the users.

    Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.

  • StrictlyVC: October 17, 2013

    110611_2084620_176987_imageGood morning! Happy Thursday, and wow, congratulations to Emergence Capital, which saw an early, $4 million invested into the enterprise software company Veeva transformed into well north of $1 billion yesterday. More details below in IPO news.

    Top News in the A.M.

    The government finally reopens. “”Good morning folks, thank you for your service,’ called out Agriculture Secretary Tom Volsack, as no-longer-furloughed civil servants streamed from the nearby Smithsonian Metro station through the doors of agency headquarters.”
    —–

    Can an ‘Airbnb’ of Outdoor Gear Work? 

    Everyone wants to be the Airbnb of something. Spinlister is among them. Launched with much fanfare last year as a bike-sharing marketplace, the platform failed to gain traction, its owners ultimately deciding to sell the business to one of their earliest investors, Brazilian businessman Marcelo Loureiro. Despite Spinlister’s lack of momentum, Loureiro isn’t fundamentally altering the business. Instead, he shut it down and relaunched it with an eye towards renting many more types of outdoor equipment. And he recently raised a $1.65 million seed round from friends and family to help the process along.

    The question remains whether enough people want to rent their outdoor goods. Yesterday, I chatted briefly with Loureiro about why they should, and what he hopes to do about it.

    Your business seems very hard to scale. Is that fair?

    We need to connect with the right audiences first. Originally, we were just connecting with the tech community, and a lot of bikes got listed, but not a lot of users joined. Now, we’re targeting more hard-core cyclists, and while we’re not seeing exponential growth, it’s solid and constant.

    When are you broadening out Spinlister’s offerings?

    In mid-December, when we have enough inventory, we’re planning on opening up the platform for other sports equipment, starting with skis and snowboards. Afterwards, we’ll add skateboards and surfboards and camping gear and kayaks — anything you have in your garage that you aren’t using. A lot of cyclists have snowboards or skis, and a lot of snowboarders have bikes, but we weren’t talking to them. There’s a whole community that’s just sitting on gear and we’re now very focused on creating awareness [within that community].

    People rent their bikes for $20 a day on average. How much of that fee do you collect?

    I take 30 percent: 12.5 percent on the renter’s side as a service fee as 17.5 percent as a lister’s fee. It sounds like a lot, but it’s what we need right now to keep the lights on. We do have people making [real] money renting bikes. If you have a good bike or bikes in a good location, you’re going to get the business.

    Where are you seeing the most traction? 

    We have bikes listed all over the world. But right now, we have the most inventory in San Francisco and New York, with 350 bikes in New York and 500 bikes in SF.

    Is that more or fewer bikes than people are trying to rent in those cities?

    We have more demand than supply. My fulfillment [rate] is around 35 to 40 percent of requests because I don’t have the inventory, or sometimes the bike’s owner isn’t available in time or the bike is broken.

    Other complicating factors must include drop-off and pick-up, along with theft, (despite that you cover damages). Why are you so convinced in this model?

    Access trumps ownership; it’s where things are headed. You used to own CDs; now you access Spotify whenever you want. I think similarly, people will access, versus own, their gear. I talked recently with [big wave surfer] Laird Hamilton, and he [suggested that with Spinlister] everyone who lives by the beach who has a few boards can have a business without having a shop. It’s the same with people who own multiple bikes.

    Down the road, there are lots of opportunities to [capitalize] on the knowledge we’re amassing about what kind of equipment people like to use. That kind of data could be very valuable to brands, for example, who could also test new gear within the platform.

    It’s early. This year has been about building and fixing a lot of stuff; in 2014, we go after the users.

    ContentCtrlBanner_250x300

    New Fundings

    AppLife, a year-old, Berlin-based, mobile games marketing platform, has raised $7 million from existing investor Prime Ventures. The company has raised $20 million altogether from Prime.

    Boxer, a year-old, Austin, Tex.-based email management system, has raised $3 million in funding led by Sutter Hill Ventures.

    G1 Therapeutics, a five-year-old, Chapel Hill, N.C.-based pharmaceutical company that’s largely focused on cancer therapies, has raised a $12.5 million Series A round led by MedImmune VenturesHatteras Venture Partners and Mountain Group Capital also participated in the funding.

    Kii, a provider of tools for mobile developers, has closed on $7.3 million in funding from Fenox Venture Capital and other investors. The company, which has offices in San Francisco and Tokyo, was formed in 2010 through the merger of Servo Software and Synclore Corp., companies that were focused on mobile data synchronization and backup.

    Mapbox, a three-year-old, Washington, D.C., has raised $10 million in Series A funding from Foundry Group. The company’s cloud-based map platform allows users like designers and news outlets to create and share interactive Web maps.

    Mintingo, a four-year-old, San Mateo, Calif.-based marketing intelligence company, has raised $10 million in Series C funding led by Adams Street PartnersSequoia Capital and Giza Venture Capital, which led Mintigo’s $9 billion round, also participated.

    Sage Therapeutics, a two-year-old, Boston-based company that’s developing medicines for central nervous system disorders, has raised $20 million in Series B financing from investors ARCH Venture Partners and Third Rock Ventures. To date, the company has raised $57.8 million.

    Stitch Fix, a 3.5-year-old, San Francisco-based online shopping platform, has raised $12 billion in Series B funding from Benchmark Capital. The round brings the company’s total funding to date to $16.8 million. Earlier investors include Baseline VenturesLightspeed Ventures Partners, and Western Technology Investment.

    Usermind, a new, Seattle-based startup whose software aims to make business operations people more productive, has raised a $7.6 million led by Andreessen Horowitz, which was joined by Charles River Ventures and SV Angel. (Vator News has much more here.)

    —–

    New Funds

    5AM Ventures, a 12-year-old, San Francisco-based seed and early-stage venture capital firm focused life science companies, is looking to raise a fourth, $240 million fund, according to an SEC filing. The Form D says the firm has yet to begin fundraising; it lists the firm’s three managing directors: John Diekman, Scott Rocklage, and Andy Schwab.

    Camden Partners, an 18-year-old, Baltimore based firm that specializes in growth capital opportunities, is raising its fifth fund, according to an SEC filing. The first sale has yet to occur, according to the firm; no target is listed.

    Javelin Venture Partners, a four-year-old, San Francisco-based early-stage venture firm, has raised $125 million for its third fund. It also promoted principal Alex Gurevich to partner. Javelin had raised $105 million for its most recent fund in 2011.

    SoftTech VC is raising a fourth, $85 million, fund, according to an SEC filing, which says the first sale has yet to occur. The firm, founded by Jeff Clavier, raised a $55 million third fund in January 2012. Clavier alone is listed on the filing.

    —–

    Exits

    SMS Masterminds, a small, San Luis Obispo, Calif., loyalty marketing business, is being acquired by SpendSmart Payments Company, a Des Moines-based prepaid payments services company. Terms of the deal aren’t being disclosed.

    —–

    IPOs

    Veeva Systems, a 6.5-year-old, Pleasanton, Calif.-based maker of CRM software for life sciences companies, went public yesterday, selling more than 13 million shares at an offering price of $20 per share. The stock soared throughout the day, closing at $37.16, up 85.8%. The company’s biggest institutional backer is Emergence Capital Partners, which owns 31 percent of the company, according to SEC filings. Emergence’s LPs include the California Public Employees’ Retirement System and the University of Michigan. Bloomberg has more here.

    —–

    Happenings

    In San Francisco, you might want to check out day two of the GigaOm Mobile event. Details are here.

    It’s also day two of the MobileCon 2013 conference in San Jose.

    Meanwhile, in Chicago today and tomorrow: Erikson’s TEC CenterColumbia College Chicago, and Catherine Cook School are hosting an early childhood technology conference that focuses on tech use in early childhood programs (and features app developers). You can find out more here.

    —–

    Job Listings

    Velos Partners, one of L.A.’s newest venture firms, is looking an analyst with two years of work experience in a related field. (VC, private equity, banking, and management consulting all count.)

    —–

    Essential Reads

    Maybe it’s time to stop making fun of fusty old AOL? ComScore says it’s  now the biggest video ad property in the U.S.

    —–

    Detours

    The new, new thing? Private music festivals. (You’re no one until you are invited to Burning Lamb.)

    A Sydney company thinks it has solved the same-day delivery problem and its attendant expenses: Flying robots.

    The National #Selfie Portrait Gallery opens this week at the Moving Image Contemporary Art Fair in London.

    —–

    Retail Therapy

    Inspiring views!

    Pants that make us wonder: do men’s clothing designers hate men?

    The flask for people who pretty clearly don’t understand the point of flasks.

    ——-

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