• Peter Thiel’s Other Fund, Mithril Capital Management, Raises $600 Million

    Ajay RoyanPeter Thiel is having a good month.

    According to a new SEC filing, low-flying Mithril Capital Management, which Thiel co-founded with longtime colleague Ajay Royan in 2012, is out raising its second fund with a $600 million target. Sources say the fund is already oversubscribed, however, and that it may hit $1 billion before it holds a final close.

    Emails and a call to the firm were not returned Friday afternoon.

    The vehicle marks the second giant fund that involves Thiel in one week’s time. The Friday before last, Founders Fund, the early-stage venture firm he co-founded in 2005, closed its sixth fund with $1.3 billion.

    There’s seemingly no end to LPs’ appetite for anything involving Thiel, though it’s also worth noting that aside from his involvement, the firms don’t feature much overlap.

    StrictlyVC sat down with Royan in 2014 to discuss Mithril, which is named after a fictional metal from J. R. R. Tolkien’s fantasy writings. The way he explained its focus then was as a growth-stage fund, one focuses on established companies that are leveraging tech in some way but are not necessarily tech companies. (He compared it, in fact, to a young General Atlantic.)

    Though Mithril has backed some tech companies, including the cloud service marketplace AppDirect; Classy, which provides online fund-raising services for nonprofits; and the data analysis giant Palantir (which is one of Founders Funds’ biggest bets to date), it has numerous bets that better underscore its mandate, including to fund companies too mature for many VCs yet that don’t fit the mold of a private equity investment, either.

    More here.

    Connie

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  • What Life Science VCs Got Right In This Last Boom

    healthcareIt’s long been the case that life sciences investors don’t get the attention that their more traditional tech counterparts do. They’re underrepresented on lists of top investors in venture capital. They’re also remarkably underfunded, according to institutional investors (or limited partners) who back venture firms.

    It’s the “life sciences guys who are smart as hell,” says one LP who’s grown frustrated with some of the tech-focused firms he has backed because they’ve haven’t produced the cash-on-cash returns he expected, yet who’s exceedingly happy with bets on firms like Third Rock Ventures, a 10-year-old, Boston-based outfit that incubates biotech startups and which took many of those companies public before the IPO window largely slammed shut last fall.

    Taking companies public is “exactly what the tech guys should have been doing,” says this person, who represents a sizable endowment.

    Whether the LP is being completely fair is an open question. Certainly, in recent years, many more biotech startups have gone public than consumer or enterprise startups, with public investors seemingly drawn in part to unprecedented levels of innovation, including new machine therapies and other treatments for a variety of diseases that couldn’t be addressed earlier in time.

    However, even healthcare investors are quick to point out that they took so many companies public in part because they didn’t have much choice.

    More here.

    Connie

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  • A VC in Greece, Operating in Tumultuous Times

    Screen Shot 2016-03-21 at 11.23.34 AMGeorgios Kasselakis has the same concerns as most VCs: How to raise money, how to grow the money investors provide him, how to identify the most promising startups.

    Unlike most VCs, Kasselakis and his seed-stage firm, OpenFund, are based in Athens, Greece, a country that’s nearly bankrupt and where, even worse, more than 44,000 refugees are now trapped (a number that’s growing daily, owing to the closed-door policies of its neighbors).

    We talked with Kasselakis last week via email to learn more about how seven-year-old OpenFund operates, and how it’s coping with what’s happening all around it.

    How much money is OpenFund managing?

    We sit on top of a €15 million fund, which is our second one. [It’s] a big jump from the €500,000 that we originally launched with.

    How many companies has your firm funded to date?

    We’ve made more than 20 investments in our second fund. While small by Silicon Valley standards,  you have to keep in mind the cost of labor for highly trained knowledge workers (developers, IT, network), which is roughly six to seven times less than the Valley.

    How many other active tech venture firms are there in Athens?

    There are four:  Odyssey Venture Partners; First Athens; VentureFriends, which just launched; and PJ Tech Catalyst.

    Is that more or less than, say, five years ago?

    A lot fewer. At some point, a fund of funds firm called Taneo had helped create more than 10, which were then discontinued. Most fund managers stumbled on the crisis, panicked, and didn’t do any investments at all.

    More here.

    Connie

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  • Human Ventures Turns ‘Normals’ Into Founders

    2015 Megan & Heather Headshots

    A number of startup studios are in the midst of a years-long experiment, providing back-end assistance, office space and mentoring to talented, ambitious people in order to create a startup with them, often based around their expertise.

    Betaworks was the first to try it, opening its doors in New York roughly nine years ago. Others, including Expa, a San Francisco-based firm with an office in New York; Science, based in L.A.; and Chicago-based Roniin are among many newer models, each with their own twist.

    Human Ventures, which opened its doors in New York roughly a year ago, thinks it has struck on a model that can work, too.

    The outfit was founded by entrepreneur Joe Marchese, who’d sold his adtech company to 21st Century Fox for $200 million in late 2014. But Marchese is just the largest among a group of mostly New York-based angel investors who are investors in Human Ventures. Indeed, the now six-person firm, which has raised an undisclosed amount of money, is largely run by CEO Heather Hartnett and Megan O’Connor, who joined the firm last May as its chief growth officer.

    They aren’t longtime startup veterans. Hartnett ran business development at the venture firm City Light Capital and, before that, worked in philanthropy, including at the David Lynch Foundation. O’Connor also worked previously in nonprofits, including as a development director at both Pencils of Promise and Goods for Good.

    That they’re comparative outsiders is kind of the point of Human Ventures, though.

    More here.

    Connie

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  • VC Michael Goguen’s Counter-Complaint Calls Accuser an “Exotic Dancer” Looking for a “Payday”

    MIchael GoguenMichael Goguen, the longtime venture capitalist who was asked to leave Sequoia Capital following a stunning breach of contract complaint, yesterday filed a counter complaint in San Mateo County Court that proposes the accusations against him are a myth.

    In reaction to claims that Goguen sexually and emotionally abused a woman named Amber Laurel Baptiste for more than a decade, and then failed to follow through on an agreement to pay her $40 million to keep her claims confidential, Goguen is now countersuing Baptiste for extortion.

    He’s not holding any punches. In his countersuit, Goguen’s legal team paints a picture of a woman in love with him, and features a long list of text and email messages from Baptiste to underscore that depiction.

    Among them: “The love that I hold in my heart for you was instant. It is a perfect love. And to me it is the perfect way to love someone. It is forever and unconditional;” “I love our visits. I feel so blessed to have met you and have been able to maintain a special relationship with you. I can only hope that it continues;” “I know it feels really good when we are together and to me it feels so perfect and I never want to let go of you;” and “I miss you so Much [sic]. My Body Misses you so Much. I love you so Much.”

    The counter-complaint also features pictures that Baptiste, born in 1980, had allegedly sent to Goguen of herself dressed in lacy lingerie.

    Goguen had joined Sequoia Capital in 1996, five years after getting his master’s degree in electrical engineering from Stanford. (The now-52-year-old studied electrical engineering as an undergrad at Cornell.)

    More here.

    Connie

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  • VC Michael Goguen Hit with Explosive Lawsuit

    MIchael GoguenMichael Goguen, a longtime partner at Sequoia Capital who joined the tony Sand Hill Road firm roughly 20 years ago, has been named in an extraordinary breach of contract lawsuit that accuses him of sexually mistreating a woman he met in 2001, then refusing to honor a financial arrangement they made in more recent years to keep her from suing him.

    Filed in San Mateo County court on Tuesday of last week, Goguen is accused of having abused the plaintiff, named Amber Laurel Baptiste, “sexually, physically and emotionally for over 13 years.” More centrally, states the complaint: When Baptiste “could no longer tolerate his behavior,” Goguen signed a contract to pay her $40 million “as compensation for the horrors she suffered at his hands.” But “after paying her $10 million, Mr. Goguen refused to honor the rest of his agreement.”

    Baptiste could not be reached for comment Friday night. Her attorney, Patricia Glaser of the L.A.-based litigation firm GlaserWeil, is traveling in Israel, according to her office; she has not responded to an emailed request for comment.

    Goguen’s attorney, Diane Doolittle, the co-chair of the national trial practice at Quinn Emanuel Urquhart & Sullivan, meanwhile wrote us a statement Friday night, saying: “On Monday, we will be filing a legal cross-complaint against [Baptiste] alleging extortion. The cross complaint will include an enormous amount of evidence, and cite contemporaneous emails and texts, that will help paint a full and complete picture of this entire matter. We will rely on all of this evidence to mount the most vigorous defense possible in court.”

    Either way, Goguen looks to be out of a job suddenly. Reached Friday night for more information, a Sequoia spokesman wrote us that, “We first learned of these claims yesterday. We understand that these allegations of serious improprieties are unproven and unrelated to Sequoia. Nevertheless, we decided that Mike’s departure was the appropriate course of action.”

    In Baptiste’s complaint, she is described as a “victim of human trafficking since she was 15.” It says that she was “brought to America in 2001,” “sold as a dancer to a strip club,” and that shortly after her arrival, she met Goguen at a Texas strip club and was soon submitting to his “constant sexual abuse” and “relying on his promise that he would help her break free of the human traffickers who held her in perpetual debt.”

    Continues the complaint, “Unbeknownst to Ms. Baptiste, Mr. Goguen was a worse predator than the human traffickers who were keeping her in bondage.”

    More here.

    Connie

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  • Andreessen Horowitz Talking with LPs About a New $1.5 Billion Fund

    Andreessen HorowitzThe venture firm Andreessen Horowitz is talking with investors about a fresh $1.5 billion fund, according to several sources who note the fund could always close at a higher number.

    It was almost exactly two years ago that the firm closed its forth, multi-stage venture capital fund, Andreessen Horowitz Fund IV, with $1.5 billion.

    The money also comes on the heels of a $200 million fund that the firm announced in November called the AH Bio Fund, a vehicle that’s being used to invest in mostly early-stage startups at the intersection of computer science and life sciences.

    Altogether, Andreessen Horowitz, which launched in June 2009, has so far raised $4.35 billion, including three previous funds.

    The firm declined to comment for this story, but it’s easy to imagine that even Andreessen Horowitz – considered one of the top venture firms in the world — isn’t finding fundraising quite as easy as it has in the past given uncertainty in the broader market.

    Though it will undoubtedly reach its target, the young firm is looking for capital at a time when its own investors may not be feeling terribly flush.

    As Chris Douvos, a limited partner with Venture Investment Associates, recently told us, “LPs are definitely yelling at VCs to put some ‘moolah in the coolah.’” Institutional funds “give out money [to VCs] expecting it will come back with profits in a reasonable amount of time,” said Douvos. “When it doesn’t, we can’t put more money into the asset class because a.) we’re at the top of our allocation [to venture capital and b.) we’re out of money.”

    Indeed, the firm looks to have spent recent months preparing to woo investors, including by liquidating part of its stake in the car-sharing company Lyft in December.

    As the WSJ reported earlier this month, both Andreessen Horowitz and early Lyft backer Founders Fund sold some of their shares to Saudi Arabia’s Prince al-Waleed bin Talal and his Kingdom Holding Co. (Taking money off the table and making distributions to LPs is a decision their fellow investor Fred Wilson recently argued more venture firms should be doing more frequently.)

    Andreessen Horowitz has also been shifting its staff around quite a bit.

    More here.

    Connie

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  • Bill Maris Talks Uber, Zenefits, and Running the Show at GV

    untitled-3589 (1)Thursday night, at a StrictlyVC event in San Francisco, we talked with GV CEO Bill Maris about a wide range of issues, including what happened with its Europe fund, why GV didn’t invest in Zenefits, and why Maris alone makes every decision on behalf of the powerful venture unit, which now employs 70 people.

    As venture geeks, we found much of what he had to say interesting. Hopefully, you’ll find the conversation instructive, too. (It’s been edited lightly for length.)

    You work for the most valuable company in the world. You run its venture arm. Every decision falls to you and you alone, which not everyone realizes.

    It’s getting scary. [Laughs.]

    What is the trickle-up process?

    So all the investment decisions I make, going into a company or when and how to come out of it, is in collaboration with the partner who brings [the deal] forward. So we talk about all the opportunities as a team and everyone is invited to that discussion – not just the investing partners. And we don’t take a vote. It’s not like a democracy in any way. But everyone knows where people stand and we try and give each other good advice, and at the end of the day, the person who brings it forward and I decide whether to move forward or not.

    Why isn’t it more democratic?

    I have no idea, because I’ve never worked as a venture capitalist before. I masquerade as one now . .  . But basically it started out with just me. The buck stops with me. So if we succeed, credit all goes to the team. If we fail, the blame should fall all on me; that’s how management should work.

    Do Larry Page or Sergey Brin ever say, “Bill, why’d you invest in XYZ deal?”

    They never say anything. And that’s not a bad thing. We designed it specifically not to be influenced by Google. Larry and Sergey . . . are billionaires. Google has many billions of dollars. If they want to invest in something themselves, they have the opportunity to do that.

    Some people are surprised that they don’t or can’t influence [GV], but the idea was that they wouldn’t. So I never talk about ventures with them. The closest we get is an email from Larry with a URL of a company that he came across.

    Much more here.

    Connie

  • Social Capital’s Newest Partners on How the Firm Works

    social-capitalAshley Carroll and Arjun Sethi never thought they’d be working as venture capitalists. Yet in the last year, both have landed at Social Capital, a 4.5-year-old, Palo Alto, Ca.-based firm that incubates and invests in companies in healthcare, education, financial services, mobile and enterprise software.

    Social Capital was also, somewhat famously, created by Chamath Palihapitiya, a straight-shooting former Facebook and AOL executive who brought in as cofounders Mamoon Hamid and Ted Maidenberg, former colleagues at USVP. Hamid started his investing career at USVP; Maidenberg’s first gig as a VC was at Time Warner Ventures in 1999.

    Carroll joined the firm last spring after previously working as a product lead at Docusign, Optimizely, and SurveyMonkey. Sethi was the cofounder and CEO of the mobile messaging app MessageMe, which was acquired by Yahoo for reportedly “double digit millions” in 2014; he remained at Yahoo as a senior director or product management until last month.

    Neither was new to Social Capital when they joined, having served separate stints as EIRs. In fact, during a recent sit-down, the two – who bring Social Capital’s investment team to five people — told of a very fluid firm where entrepreneurs and investors drop in, hang out, then move on to other projects, often to return again. “It’s really a community of entrepreneurs-in-residence, executives-in-residence, engineers-in-residence, all loosely coupled but tightly aligned,” said Carroll.

    Here are some other ways the firm is a little different from traditional venture firms:

    More here.

    Connie

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  • For DFJ, a Quick Close on Fund XII

    VentureTeamDFJ_hr (1)DFJ, the 31-year-old, Sand Hill Road venture firm, is announcing a new, $350 million fund this morning — the firm’s 12th early-stage vehicle.

    We chatted with managing director Josh Stein yesterday about the effort, which he says took about two months from start to finish.

    The biggest takeaway: Expect more of the same from the firm, which typically plugs between $10 million and $15 million into its startups; has six investment partners, including firm cofounder Steve Jurvetson; and has become known, largely owing to Jurvetson’s bets, as an outfit willing to gamble on companies that are little out there — sometimes literally.

    Among the firm’s many Jurvetson-led investments: the rocket company SpaceX, the satellite company Planet Labs, and the electric car company Tesla Motors. Indeed, Jurvetson accepted a Crunchie award on behalf of SpaceX at last night’s Crunchies awards ceremony. The company won for the category of best technology achievement for its two-stage rocket, the Falcon 9, which was designed to transport satellites and SpaceX’s own Dragon spacecraft into orbit.

    Stein wouldn’t talk yesterday about the internal rate of return of any of the firm’s previous funds. He did say DFJ’s last fund — a $325 million vehicle closed exactly two years ago — has backed an as-yet-undisclosed autonomous transportation startup that “we think could be the biggest company we’ve ever been involved with.”

    More here.

    Connie

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