Hi, happy Thursday, everyone! Investor-writer is Semil Shah is still whipping up our columns while Connie is off playing infinity tag. To reach out to Semil, you can usually find him on Twitter.

Quick note: our upcoming event, on September 16 in San Francisco, is pretty much sold out at this point, though we can squeeze in a few more of you. Tickets are here. Giant thanks to our wonderful sponsors Bolt, GLG, and Ludlow Ventures, without which the night — at the lovely Autodesk Gallery — would not be possible. We’re very excited to see all of you next month.:)

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Top News in the A.M.

Booking a hotel online may soon get more expensive, hotels warned yesterday.

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Quick Chat with Homebrew’s Satya Patel

By Semil Shah

Some people are operators, some are investors. Few have so effortlessly moved from one side of the table to the other — and back — as Satya Patel, who over the course of his career has held such roles as VP of products at Twitter, partner at Battery Ventures, senior product manager at Google, and senior associate at Impact Venture Partners.

Put another way, Patel — who in 2013 cofounded the venture firm Homebrew with former Google colleague Hunter Walk, an outfit that’s already on its second fund — knows a thing or two about Silicon Valley’s undulations. We talked with him about it recently.

With companies staying private longer and fewer M&A deals being done, how much of a liquidity crisis are early-stage investors facing?

Most early-stage investors have a long-term horizon for liquidity, so the fairly recent changes in the IPO and M&A markets haven’t had a major impact on their ability to raise new funds.  Over the longer term, if the IPO and M&A trends hold, the combination of a lack of liquidity and expensive holdings is going to mean a real crisis for them.

Do LPs sense exits could be further out given the shifts we’re seeing in the private markets?

Yes, LPs definitely see that the time to achieve liquidity is longer for various structural reasons.  But the bigger concern is the increase in cost basis for most investments, particularly at the later stage.  They believe that when liquidity does come, returns will be depressed relative to historical norms for all except the very best funds.

What’s a deal at Homebrew you missed on and regret? 

The honest answer is that we’re only two and a half years old, so it’s hard to say that we regret anything that we missed or passed on yet. Those companies are nowhere near liquidity, even though in a ton of cases they have gone on to raise huge amounts of capital at high valuations. That said, there was an investment in the commercial real estate software market that we lost six months after starting Homebrew that we consider a likely major loss. The company chose to work with investors that had been around much longer, with extensive track records in relevant markets.  We would have made the same decision at that time as the founders, but we still consider it one of the ones that got away. In general, we have conviction about our strategy and believe that in many cases, we’ve passed up short-term write-ups to avoid long term pain.

There’s been a growing chorus of people saying  that seed is the new Series A. Do you buy that? 

I think the labels are meaningless.  At which “stage” a fund invests and with what dollar size investment is largely a function of fund size.  Our goal at Homebrew is to be first institutional capital supporting a company with an investment between $200,000 and $1 million.  Often that is pre-product, and other times that’s with a beta or more developed product in the market.  Because there are so many seed-stage companies, the bar for raising the next round of financing is that much higher; even more is required to stand out from the crowd. So maybe in the past, you only needed to build the product with seed dollars.  Now, you have to build the product and establish product/market fit with seed capital. Does that mean seed is the new Series A?  It doesn’t matter what you call it. It’s the new normal.

You’ve been in the Valley for a long time. What’s your sense of the health of the overall ecosystem right now?

The ecosystem seems to be as strong as it’s ever been.  There are more startups, more sources of capital, more information resources, more places — accelerators, labs, schools — to learn and more job opportunities than I can remember.  The countervailing forces of limited liquidity and frothy valuations may slow down the ecosystem’s momentum.  But there doesn’t seem to be anything that will stop the ecosystem from continuing to grow in all of those areas if you take a long-term view.

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New Fundings

AddtoApp, a year-old, L.A.-based programmatic mediation platform for in-app advertising, has raised $6 million in new VC funding from Run Capital Investment Fund.

Aihuishou, a four-year-old, Shanghai, China-based used electronics trading and recycling platform,  has raised $60 million in Series C funding led by Tiantu Capital, with participation from JD.com and earlier backers Morningside Ventures and the International Finance Corporation. The company had reportedly raised at least $12 million previously.

Bastille, a year-old, Atlanta, Ga.-based cybersecurity company designed to detect and mitigate threats coming through connected devices, has raised $9 million in Series A funding led by Bessemer Venture Partners, with participation from cybersecurity entrepreneur Tom Noonan and Bastille founder and CEO Chris Rouland. The company has now raised $11.5 million altogether.

CashStar, an eight-year-old, Portland, Me.-based provider of prepaid mobile and web commerce solutions for retailers and restaurants, has raised $15 million in Series D funding led by FTV Capital, with participation from Mosaik Partners and return backers, including Passport Capital, Intel Capital and North Hill Ventures. The company has now raised a total of $50 million.

Enjoy, a year-old, San Francisco-based company that sells high-end consumer electronics, as well as offers delivery and in-home set-up services, has raised $50 million in Series B funding led by Highland Capital Partners, with participation from earlier backers Kleiner Perkins Caufield & Byers and Oak Investment Partners. The round brings total funding for the company, founded by former Apple retail chief Ron Johnson, to $80 million.

Fastly, a four-year-old, San Francisco-based content delivery network that focuses on helping companies deliver dynamic content to their users faster, has raised $75 million in Series D funding led by ICONIQ Capital. Existing investors Amplify Partners, August Capital, Battery Ventures, IDG Ventures and O’Reilly AlphaTech Ventures also participated in the financing, which brings the company’s total funding to $130 million.

Jibo, a three-year-old, Cambridge, Ma.-based consumer electronics company that has developed a “family friendly robot” called Jibo, has raised $11 million in funding from Asia-based investors, including Acer, Dentsu Ventures, China’sNetPosa and operators KDDI (Japan) and LG Uplus (Korea). The capital follows a crowdfunding campaign that saw the company raise $3.7 million (it was targeting $100,000), and a $25.3 million round led by RRE Ventures in January of this year. TechCrunch has more here.

LifeBond, an eight-year-old Caesaria, Israel-based based company that makes surgical sealants, has raised $27 million in Series D funding from Adams Street Partners, Sino Biopharmaceutical and earlier investors Pitango Venture Capital, Glenrock Israel and Zitelman Group.

Payable, a two-year-old, Sunnyvale, Ca.-based company that lets contractors measure and bill their hours and help businesses manage their invoices in a single dashboard, has just raised $2.1 million from Freestyle Capital, Redpoint Ventures and SherpaVentures, Lerer Hippeau Ventures,Rothenberg Ventures, Haystack, Moment Ventures and other angel investors. TechCrunch has more here.

Practo Technologies, a seven-year-old, Bangalore-based maker of online practice management software for doctors, has raised $90 million in new funding led by the Chinese internet giant Tencent, with participation from Google Capital, investor Yuri Milner, the Belgium-based investment firm Sofina, Altimeter Capital Management, and earlier backers Sequoia Capital and Matrix Partners. The company has now raised about $125 million altogether.

SavingGlobal, a 1.5-year-old, Berlin, Germany-based retail deposit brokerage platform, has raised €20 million ($21.8 million) in Series B funding led by Ribbit Capital and Index Ventures. Investors Yuri Milner and Tom Stafford also participated in the round, which brings the company’s total funding to $32.7 million. TechCrunch has more here.

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New Funds

Arboretum Ventures, a 13-year-old, Ann Abor, Mi.-based venture firm, is looking to raise up to $215 million for its newest fund, according to an SEC filing. If successful, it will become the largest venture fund ever raised in Michigan.  Crain’s Detroit Business has more here.

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Exits

Affirm, the new lending startup from PayPal cofounder Max Levchin, has acquired LendLayer, a year-old, Mountain View, Ca.-based startup that provides lending for accelerated learning programs like Hackbright Academy. Terms of the deal weren’t disclosed, but TechCrunch describes the deal as a “talent transaction.” More here.

Adidas Group, the sports company, has acquired the six-year-old, Austria-based fitness app maker Runtastic for €220 million ($240 million). The largest shareholder in Runtastic was German media giant Axel Springer, via its investment subsidiary Axel Springer Digital Ventures, which owned 50.1 percent of the company. TechCrunch has more here.

SurveyMonkey, a Palo Alto, Calif.-based online survey software company, earlier this week acquired TechValidate, an eight-year-old, Emeryville, Ca..-based provider of marketing content automation software. No financial terms were disclosed. SurveyMonkey has raised more than $1 billion from investors; TechValidate doesn’t appear to have raised outside funding. Fortune has more here.

WeWork, the well-funded tech and real estate company, has acquired seven-year-old, New York-based Case, a building information modeling and consultancy firm  that advises landlords, architects, contractors and engineers on how to efficiently design and manage buildings. Terms of the deal were not disclosed. The Real Deal has more here.

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People

The organic food delivery startup Good Eggs is scaling back on things pretty dramatically. In a blog post yesterday, cofounder and CEO Rob Spiro said the company is shutting down its operations in Los Angeles, New York City and New Orleans and focusing alone on its remaining location, San Francisco, for now. The company is also shedding more than half its workforce, laying off nearly 140 employees and continuing to operate with “100+,” in his words. Good Eggs has raised $52 million in its four-year history, shows Crunchbase. Its investors include Baseline Ventures, Collaborative Fund, Correlation Ventures, Harrison Metal, Index Ventures, Sequoia Capital and The Westly Group. TechCrunch has more here.

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Essential Reads

Why Google‘s antitrust deal with the EU fell apart.

Reddit has shut down another group of offensive sections on its website as part of a revision to last month’s policy change. Bloomberg has more here.

Dating app Tinder is getting into the speed networking business. TechCrunch has more here.

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Detours

Jon Stewart’s greatest takedowns: The internet’s definitive list.

The 12 best tech TV commercials of all time.

The Pierre.

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Retail Therapy

Escape Traveler. It takes the RV to a new level completely.

Hi, everyone, hope your Wednesday is off to a promising start!

If you have questions or comments about today’s newsletter, you can typically find investor-writer Semil Shah (who is nicely writing StrictlyVC’s columns for Connie while she takes some time offline) right here on Twitter.

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Top News in the A.M.

Apple to the media: “We have not discussed nor do we have any plans to launch an MVNO.” More here.

Etsy reported another quarterly loss yesterday; its shares are now trading down roughly 46 percent since its IPO.

Yesterday, Netflix introduced an unlimited leave policy for new moms and dads that allows them to take off as much time as they want during the first year after a child’s birth or adoption. (“The talent is growing up,” notes TechCrunch.)

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Quick Chat with DCM’s Jeff Lee

By Semil Shah

Jeff Lee joined the venture firm DCM as a principal last year after running his own business for the previous four years. We caught up with him recently to see how things are going, and what insights into DCM — a 19-year-old firm that invests in the U.S., China, and Japan — he might share.

Most people know Yik Yak but don’t know DCM was an early lead investor. Does DCM like being under the radar in this sense?

At DCM we are very focused on our entrepreneurs. We like our investments to speak for themselves. That said, we also do a lot of deals in China and Japan, where I think we actually are more visible than in the U.S.

What’s happening right now in China that most people in the Valley don’t have a good read on?

Right now there is a huge amount of capital not only in China, but also in Japan, and it’s looking internationally for new opportunities. The major technology companies, “BAT” (Baidu, Alibaba, and Tencent) in China, as well as Rakuten, Softbank, and Recruit Holdings in Japan are actively looking to invest in U.S.-based companies, as well as to acquire startups. Also given that much of the mobile innovation really got started in Asia, startups should increasingly look to Asia as the emerging source of knowledge, capital, and potentially also exits.

How competitive is it for a Series A investor to win a good deal right now? You’re relatively new to DCM — how’s it been in that regard?

There is a ton of capital focused on Silicon Valley right now that has driven valuations to all-time-high levels, as well as increased competition for great deals. I prefer to get to know an entrepreneur ahead of a financing. It not only helps you lean forward on an opportunity, but ultimately helps to build [the kind of] trusted relationship you need to build a great business together.

You spent a good deal of time building your previous company in LA. What are some of the biggest changes you’ve noticed since moving back to Silicon Valley?

Well I did my undergrad at Stanford so in a lot of ways it feels like I’ve come home. I think the biggest difference between L.A. and the Valley is the pace and the feel of the community. Things happen much faster in the Valley because of the competition and size and fast feedback cycles, whereas L.A. has a tight entrepreneurial community because it tends to sit in the shadows of the entertainment industry, as well as Silicon Valley. Also because there are many other core industries in L.A. like entertainment, real estate, and autos and the population is so diverse, the types of entrepreneurs you find are also much more creative. The Valley is like the older, more mature brother of L.A.

If you could share and broadcast one niche area you’re dying to invest in, what would it be and why?

Workflow-enabled marketplaces. Complex tasks like remodeling your home have historically been difficult because they require the coordination of lots of different resources, and there’s frequently not visibility to figure out the right the small business vendors fit the job. These next generation marketplaces not only allow the user to identify the best vendors through reputation built within the system, but also coordinate the delivery of service through the SaaS-like workflow they provide. One thing I really love about these models is they’re network effect businesses that enable underserved markets, much like my prior company Cost Cooperative, which was a group- buying marketplace for small businesses. Addressing large, underserved needs with network effects are two core pieces in building an industry-defining, transformative business.
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New Fundings

Amplitude, a three-year-old mobile analytics platform designed to give developers better insights into user behavior, has raised $9 million in Series A funding led by Benchmark, with participation from Data Collective, Merus Capital, Quest Venture Partners, and entrepreneurs Dave Morin and Charlie Cheever, among other individuals. The company has now raised at least $11 million altogether. TechCrunch has more here.

BankFacil, a three-year-old, Sao Paulo, Brazil-based online loan origination platform, has raised $3 million in funding from Frontier Investments Group and Redpoint eventures. VentureWire has more here.

Bright, a year-old, San Francisco-based solar panel installation and distribution startup, has raised $4 million in seed money from a number of firms and angel investors, including First Round Capital, Felicis Ventures, Max Levchin, Patrick Collison and several Y Combinator partners. TechCrunch has more here.

Doormint, a year-old, Mumbai, India-based online marketplace for hiring workers for particular household tasks, has raised $3 million in Series A funding led by Helion Venture Partners, with participation from Kalaari Capital. It had received angel funding from Powai Lake Ventures in May. DealCurry has more here.

Leanplum, a three-year-old, San Francisco-based service that helps developers and marketers engage with mobile users through personalized messages, dynamic user-interface optimization and A/B testing services, has raised $11.6 million in Series B funding led by Kleiner Perkins Caufield & Byers, with participation from earlier backer Shasta Ventures. The company has now raised a total of $17.2 million. TechCrunch has more here.

Letstransport, an eight-month-old, Bangalore, India-based last-mile delivery company, has raised $1.3 million led by Rebright Partners, with participation from individual investors Ankush Nijhawan, Gaurav Bhatnagar, and Manish Dhingraalso. TechCrunch has more here.

Line, a 15-year-old, Tokyo, Japan-based messaging company that’s owned by the Korean internet giant Naver, has partnered with Korean game development firm LongTu to create Hong Kong-based Lantu Games, a $20 million joint venture that will begin operations this month. TechCrunch has more here.

Mark43, a three-year-old, New York-based company whose law enforcement software makes it easier for police to collect, manage, analyze and share information, has raised $10.8 million in Series A funding led by Spark Capital and General Catalyst Partners, with participation from Lowercase Capital, Govtech Fund, Allen & Co., Innovation Endeavors, and individual investors, including actress Sophia Bush and retired General David Petraeus. VentureWire has more here.

Tintri, a seven-year-old, Mountain View, Ca.-based hybrid storage startup, has raised $125 million in Series F funding led by Silver Lake Kraftwerk, with participation from Insight Venture Partners, Lightspeed Venture Partners,Menlo Ventures and New Enterprise Associates. ZDNet has more here.

Workfront, a 14-year-old, Lehi, Ut.-based maker of work management software (it was previously known as AtTask), has raised $33 million in Series E funding led by the growth equity firm JMI Equity, which also previously led the company’s $38 million Series D round last year. Greenspring Global Partners and Atlas Peak also participated in the round, which brings the company’s total funding to $95 million. TechCrunch has more here.

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IPOs

Global Blood Therapeutics, a three-year-old, San Francisco-based company whose early-stage drug is designed to treat the serious blood condition sickle cell disease and that filed to go public last month, has revealed plans to sell six million shares at $16 to $18 per share. At the midpoint of that range, the offering would bring in $102 million. Currently, the company’s two biggest shareholders are Third Rock Ventures, which owns a 63 percent stake, and Fidelity, which owns 13.2 percent.

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Exits

Publicly traded Tableau Software is acquiring another company for the first time, bringing aboard Infoactive, a three-year-old, Montreal-based startup that turns data into infographics. GeekWire has more here.

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People

San Francisco Mayor Ed Lee — who has benefited from the public support of Silicon Valley bigs like investor Ron Conway and Yahoo CEO Marissa Mayer — has been implicated in bribery and money laundering schemes, according to new filings related to the Richard “Shrimp Boy” Chow. Chow was the head of a Chinese criminal enterprise and arrested by the FBI last year. More here.

Anybody with a great startup idea in America should have a chance to explore it, suggested President Barack Obama at the first-ever White House Demo Day held yesterday in Washington D.C. GeekWire has more on the event here.

PayPal has a new CFO: John Rainey, who joins the company from United Continental Holdings. More here.

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Jobs

Rough Draft Ventures, the General Catalyst-supported, student-run investment team, is looking for a head of platform. The job is in Cambridge, Ma.

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Essential Reads

Twitter may be a takeover target — but likely not for Google, says Recode. More here.

China plans to set up “network security offices” staffed by police inside major Internet companies, a move to strengthen the government’s grip on the world’s largest population of Web users.

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Detours

The world’s highest-paid actors.

The debate over “illegal immigrant.”

A jeweler has created a line of Apple Watches that only Russian President Vladimir Putin could love.

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Detours

An incredible e-bike that costs an incredible $25,000 (to start).

Happy Tuesday, dear readers! Yesterday’s newsletter wound up in many of your spam boxes for some reason. If you wanted to catch yesterday’s issue, including our interview with Twitter persona Startup Jackson, it’s here. In the meantime, investor-writer Semil Shah is in charge of our columns for another week or so while Connie brushes up on her skateboarding. If you have questions or comments, you can find him right here on Twitter.

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Top News in the A.M.

Apple is reportedly in talks to launch its own virtual network service in the U.S. and Europe.

Microsoft‘s offshore profits have surged past the $100 billion mark.

Samsung Electronics said yesterday that it will create a 100 billion won ($85.8 million) fund to compensate cancer-stricken workers and their families, and to help prevent more of the same at its chip and display factories.

Twitter‘s shares dropped yesterday to their lowest level since the company’s November 2013 IPO, sparking takeover talk.

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Notation Capital on Life as a Pre-Seed, East Coast Fund

By Semil Shah

In February, Nicholas Chirls and Alex Lines, who previously helped develop companies at the startup studio Betaworks, closed their first fund with just $8 million dollars. Their Brooklyn-based firm, Notation Capital, calls itself a “pre-seed” investor. We caught up with Chirls recently to learn more, and see how things are going.

How do you manage to run Notation Capital full-time despite it being a small fund  and therefore earning lower fees?

In order to pay ourselves modest salaries, we operate the fund using a budget rather than the typical 2 percent yearly management fee. Fees remain effectively equivalent to 2/20 funds over time, but the budget allows Alex and myself to front-load some of the management fees. It works well for very small micro-funds and is in many ways more transparent than traditional 2/20 funds because management fees tend to obscure other fund expenses like legal and fund admin, among others, [that limited partners], especially individuals, often don’t realize they’re paying other fees in addition to the management fee. Alex and I run Notation Capital extremely lean; it’s just us, we have a small office in Brooklyn, and although I previously would have scoffed at VCs comparing their new funds to startups, there are no doubt some similarities.

Do you have plans in place to follow-on in your portfolio as companies raise more money?

So this is a really tough question for funds of our size that take a relatively concentrated approach to portfolio construction. (For us, that means approximately 30 to 40 companies in the fund.)

There are a couple of ways to approach this question. The first approach doesn’t save any for follow-on rounds out of the core fund, and instead focuses on writing relatively larger checks in order to obtain higher initial ownership. As companies raise additional financing, especially those that break out, there may be opportunities for the fund to structure pro-rata SPVs either with [our] existing LP base or on platforms like AngelList. It’s important to note that for non-institutional funds — Notation is a mix of institutions and non-institutions — that traditionally have a more complex LP base, structuring these SPVs can be super complicated and potentially riddled with conflict, so this can be a tough strategy in practice to execute.

The alternative, and slightly more conservative approach, is to write relatively smaller initial checks earning less initial ownership with the intention of saving meaningful pro-rata to maintain ownership through the seed, and potentially Series A out of the core fund.  We’re still only 6 months into operating our first fund, so in many ways we’re still refining our strategy, but initially we’re leaning towards higher initial ownership with less reserved for pro-rata.

Give us a sense for what valuation prices are like for pre-seed, seed, and seed extension + A rounds in New York and the East Coast more broadly.

Pre-seed valuations are around $1 million to $3.5 million. Seed valuations are between $4 million and $8 million. And A round valuations are between $10 million and $25 million-plus.

Have you had founders in Silicon Valley approach you for pre-seed funding yet?

We have, mainly because we’ve worked with quite a few founders in Silicon Valley at previous firms and companies. The concept of pre-seed, which is really just what we considered seed a few years ago, is quickly becoming a regular part of startup vocabulary. So positioning ourselves as one of the newer pre-seed funds in NYC has helped to tell our story. At the moment, we’re focused on building a community of founders specifically here in NYC, but that will change as our strategy evolves and our firm grows.

Is the plan to keep Notation small, or to eventually manage more funds?

This is the first of a series of funds for Notation Capital. That doesn’t mean we’ll raise significantly larger funds and move up the stack. Our bread and butter has and always will be working with highly technical founders at the infancy of an idea. What that means is that future funds will be larger in order to give us the flexibility to make meaningful follow-on investments out of the core fund and maintain ownership targets as the companies we work with mature. Our hope is that if we do it right, we’ll be working to build Notation Capital for years and decades to come.

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New Fundings

Beat the Q, a four-year-old, New South Wales, Australia-based pre-ordering and payments company, has raised $5 million in Australian dollars ($3.7 million) from the regional venture firm Reinventure, with participation from Exto Partners. More here.

Duetto, a 3.5-year-old, San Francisco-based company whose SaaS applications help hotels forecast demand, set prices and manage distribution, has raised $30 million in funding led by Icon Ventures. Other participants in the round include earlier backers, including Accel Partners, Battery Ventures, Altimeter Capital, and individual investors like Salesforce founder and CEO Marc Benioff.

FEM, a three-year-old, L.A.-based personalized video engagement platform, has raised $3 million in seed funding from Javelin Venture Partners, MESA Ventures and The Walt Disney Company via its Disney Accelerator. Venture Capital Dispatch has more here.

Mandae, a year-old, Sao Paolo, Brazil-based shipping service (it resembles the U.S. shipping service Shyp), has raised $1.5 million in Series A funding from Monashees Capital, Valor Capital Group, and former DHL CEO Hans Hickler.

Panorama Education, a 2.5-year-old, Boston-based startup that surveys students, parents and teachers to collect actionable data, has raised $12 million in new funding led by Spark Capital and Owl Ventures, with participation from earlier backers, including Y Combinator, Google Ventures, and Mark Zuckerberg and Priscilla Chan’s Startup:Education. TechCrunch has more here.

Pickingo, a 10-month-old, Gurgaon, India-based on-demand delivery service, has raised $1.3 million in seed funding led by Rehan Yar Khan of Orios Venture Partners, with participation from Toppr.com cofounder Zishaan Hayath, both early investors in Ola Cabs. YourStory has more here.

Riffsy, a 1.5-year-old, San Francisco-based company whose GIF keyboard enables users to share and discover animated GIFs and videos, has raised $10 million in Series A funding led by Menlo Ventures, with participation from Cowboy Ventures, Signia Venture Partners and earlier backer Redpoint Ventures. The company has now raised $13.5 million altogether. TechCrunch has more here.

Seriously, a two-year-old, Finland-based mobile games maker, has raised $18 million in Series A funding led by Northzone, with participation from Korea Investment Partners and earlier investors Upfront Ventures, Sunstone Capital and Daher Capital. The company has now raised $28 million altogether. Venture Capital Dispatch has more here.

Tujia, a four-year-old, Beijing, China-based company that has been likened to China’s Airbnb, has raised $300 million at valuation north of $1 billion led byAll-Stars Investment, an investment fund run by former Morgan Stanley analyst Richard Ji. Other participants in the round included the serviced-apartment manager The Ascott, and earlier investors, including Ctrip.com. The WSJ has much more here.

Zeotap, a year-old, Berlin, Germany-based data platform that connects telecom operators with the app and advertising ecosystem, has raised $6.4 million in Series A funding from Capnamic Ventures, Iris Capital, numerous angel investors and previous backers. TechCrunch has more here.

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Exits

Advance/Newhouse is spending $500 million to acquire 1010data, a 15-year-old, New York-based company that provides cloud-based big data analytics for retail, manufacturing, telecom and financial services companies. The company had raised at least one, $35 million, round of funding from from Norwest Venture Partners, which reportedly sold its stake. Venture Capital Dispatch has the story here.

Microsoft has spent an undisclosed amount of money to acquire Incent Games, a three-year-old, Austin, Tex-based company behind a  “sales gamification” platform called FantasySalesTeam. FantasySalesTeam had raised $1.4 million from ATX Seed Ventures, Central Texas Angel Network, and Marvel Venture Partners, according to CrunchBase. TechCrunch has more here.

The venture-backed digital photo startup VSCO has acquired Cambridge, Ma.-based stealth machine learning startup Moving Sciences for an undisclosed sum characterized by VentureWire as “small” and involving just one employee (presumably founder Yuanzhen Li, who has a PhD from M.I.T.). More here.

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People

Michael Evans, a longtime executive at Goldman Sachs who left at the end of 2013, has joined Alibaba as its new president to lead its international business. Evans spent the last decade running Goldman’s Asian operations. TechCrunch has more here.

Facebook cofounder Dustin Moskovitz and his wife, Cari Tuna, are donating $25 million to GiveDirectly, a new nonprofit that gives extremely poor people cash instead of traditional aid, including in Kenya and Uganda. Forbes has more here.

The insane life of serial entrepreneur Sean Parker (a Business Insider special).

Tidal, the streaming music service owned by entertainment mogul Jay Z, is facing a wave of staff departures, reports Music Week. Zena Burns, for example, who had joined the company as its senior VP of label and artist relations, appears to have left in June after just two months on the job. More here.

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Jobs

Cue Ball Capital, the venture firm, is looking to hire two associates. Interested parties can send a resume and cover letter to thuque [at] cueball [dot] com. The jobs are in Boston.

StyleSeat, which helps independent beauty professionals manage their businesses (it just raised $25 million in Series B funding), is looking to hire a business development associate. The job is in San Francisco.

Versant Ventures, the healthcare investment firm, is looking for an investor relations and marketing manager. The job is in San Francisco.

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Data

China’s stock markets: Nearly 25 years of wild swings.

European tech companies raised €3.47 billion in venture capital in the second quarter: Where it went and what it means.

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Essential Reads

Uber drivers rallied by the company to testify in a lawsuit that they wanted to stay contractors have since changed their minds, submitting new court declarations saying they were misled about the difference between contractors and employees. (Maybe it’s no surprise that another “on-demand” startup, Eden, just opted to turn its contract workers into full-time employees. More here.)

Facebook is getting in on the (live event) action. Wired has more here.

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Detours

Surfing — on a dirt bike.

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Retail Therapy

Turntable kitchen timer.

Good morning and welcome back, everyone! Hope you had a wonderful weekend.

A quick reminder that investor-writer Semil Shah is in charge of our columns while Connie is offline, riding her bicycle. If you need to reach Semil, you can find him on Twitter.

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Top News in the A.M.

After months of speculation, Nokia has agreed to sell its HERE mapping business to a consortium of automobile makers including Audi, BMW Group and Daimler in a deal valued at €2.8 billion ($3.07 billion). TechCrunch has more here.

The Honest Company is under fire, following a slew of complaints that its sunscreen is ineffective. USA Today has more here.

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Startup L. Jackson on Interest Rates, Bubbles, and Anonymity

By Semil Shah

Twitter persona Startup L. Jackson has published roughly 5,400 savvy startup-related tweets over the last four years, observations that have earned him roughly 50,000 followers — as well as great interest in uncovering his identity. So far, he has managed to keep it a secret, and if he can help it, his real name will remain unknown to most. Says Jackson of why he does it: “You are forced as a reader to judge the ideas rather than the speaker.”

We talked with him recently about his strange role in the tech-investing landscape.

Startup L Jackson seems to have the makings of a media company. Why not do the whole thing — blog, podcast, YouTube — all on the back of the Twitter account?

That sounds like a lot of work. I have a blog (startupljackson.com), but post to it infrequently due to the time it takes to do well. The others are less anonymous and more time-consuming. (I do have a day job.) Twitter is great because it fits into my normal learning-about-the-startup-world time. I can just show up and tweet about the last person I met with, an article I just read, or ideas I’ve been kicking around for a while.

Anonymity enables you to say things about people and topics that would otherwise be taboo. Is that a good or bad thing?

I am somewhat provocative, but I don’t think it’s really anything you couldn’t tweet [otherwise]. And, by the way there’s a circle of people who do know my identity. I think the common assumption is that the account is for saying things I couldn’t say [in real life], but people who know me realize I don’t have much of a filter there either.

I think the “good” thing about it—or at least the thing I think makes it interesting—is that you are forced as a reader to judge the ideas rather than the speaker. My experience is that Silicon Valley is obsessed with pattern matching and pedigree, and that makes it much harder to discuss ideas than it should be. In practice, SLJ is a great hack to get around that limitation.

You seem to like AngelList, you take Lyft Line, and you are clearly aware of the ins and outs of investing. Can we expect SLJ Ventures to be forming anytime soon? Either way, what’s your view on the continued push toward smaller funds, micro funds?

I can neither confirm or deny the SLJ fund. What fun would it be if you knew for certain which side of the table I’m on? I do use AngelList, and knowing VC is smart wherever you sit in the ecosystem.

In terms of small funds, it seems to me that there are a lot of small funds because there are a lot of new funds, and funds start small. I think it’s a obviously a great thing for entrepreneurs, and probably for LPs. Big funds can’t afford to spend their time at the earliest phases of a business, especially as they get bigger. It’s not economical when a $100,000 check is out of a $100 million-plus fund. For a small fund, a $50,000 to $250,000 check is meaningful, so they can write the check that’s meaningful, and then pay attention. These VCs are hungry.

As for the VCs/LPs, I think very early-stage investing is still inefficient in terms of discovery versus later stages, so there’s not as much of a winner-take-all dynamic, but there are still power law outcomes. I see very few Series A and B funds that I believe will beat bonds. Maybe five to ten. I think many more small funds will do well.

What excites you most about the San Francisco-Silicon Valley startup ecosystem right now? And what most concerns you?

Big picture, I think we’re in the second inning of the internet, and it’s defined by the other 90 percent (much of it in the U.S., by the way) of the world coming online with supercomputers in their pockets. That’s why I don’t think there’s a bubble, and why I think it’s less a question about the one to three big opportunities in the next decade and a question of where you want to focus. San Francisco is still ground zero. That’s exciting.

In terms of industry worries, there is a question of what happens to venture capitalists if interest rates go up significantly. We could see fewer funds at all stages. But that’s a problem for the VC industry. Tech will do fine even if financing changes significantly. If I were a VC, I’d be cognizant that the current boom is at least in part a function of investors having nowhere else to put their money.

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New Fundings

Board Vitals, a 2.5-year-old, New York-based test preparation platform for the Medical Specialty Boards, has raised $1.1 million in Series A funding from Rock Creek Capital. TechCrunch has more here.

BuzzFeed, the seven-year-old, New York-based digital publisher, is reportedly on the cusp of raising $250 million from NBCUniversal in a deal that will value the company at around $1.5 billion. Recode, which has the story, reports that early BuzzFeed investors may sell shares via secondary sales connected with the transaction. More here.

Meal Box, a year-old, Istanbul, Turkey-based healthy meal delivery startup, has raised $3.6 million in funding from regional venture firm Aslanoba Capital. TechCrunch has more here.

OYO Rooms, a 2.5-year-old, Bangalore, India-based platform for low-cost, standardized hospitality bookings throughout SouthEast Asia, has raised $100 million in fresh funding led by SoftBank. The round comes just five months after the startup raised $25 million in funding from Lightspeed Venture Partners, Sequoia Capital and Greenoaks Capital Management. TechCrunch has more here.

Snapdeal, the five-year-old, New Delhi, India-based e-commerce juggernaut, has raised $500 million in fresh funding led by the Chinese e-commerce giant Alibaba. Foxconn, the Taiwanese company, also invested, as well as Snapdeal’s earlier investor SoftBank. Snapdeal had previously raised $1.1 billion across eight rounds, shows Crunchbase. Recode has more on the newest funding here.

Uber, the six-year-old, ride-hailing company, has completed a new round of funding that values it at close to $51 billion, according to the WSJ. Among its newest investors: Microsoft and the investment arm of Indian media conglomerate Bennett Coleman & Co. More here.

Vox Media, an 11-year-old, Washington, D.C.-based digital publisher, isreportedly in talks with NBCUniversal about a new round that would value the company at $850 million. Last fall, Vox Media raised money at a $380 millionvaluation.

WizRocket, a two-year-old, Palo Alto, Ca.-based company that helps companies increase user engagement by fine-tuning mobile, web, and e-mail notifications, has raised $8 million in new funding from Sequoia Capital and earlier investor Accel Partners. TechCrunch has more here.

Zscaler, a seven-year-old, San Jose, Ca.-based company that provides its customers with integrated, cloud-delivered internet security, including web security, firewalls, and mobile security, has raised $100 million led by TPG, with participation from earlier backers EMC and Lightspeed Venture Partners. The company, now valued at north of $1 billion, has raised $138 million altogether. Venture Capital Dispatch has more here.

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Exits

Yahoo announced on Friday that it is acquiring the style-focused community Polyvore. Terms of the deal were not disclosed. Polyvore, based in Mountain View, Ca., had raised roughly $22 million over its eight years as a standalone company. Its backers include DAG Ventures, Goldman Sachs, Matrix Partners, Benchmark, Harrison Metal, and investor Aviv “Vivi” Nevo.

Battery Ventures is acquiring Physical Security Business Unit (PSBU), part of the security division of publicly listed NICE Systems, in a transaction valued at up to $100 million. Under the deal, PSBU, which makes video-management, video-analytics and situation-management software, will be spun out into an independently operating business.

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IPOs

Sounds like Practice Fusion is prepping for an IPO. It just brought aboard Alan Black, CFO at the now publicly traded help-desk software company Zendesk, as its audit chair. Venture Capital Dispatch has more here.

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People

Facebook CEO Mark Zuckerberg revealed some rare and wonderful personal news Friday. He and wife, Priscilla Chan, are expecting a baby girl. Zuckerberg also shared the news that before entering this “new chapter in our lives,” the couple suffered through three miscarriages, noting it was not easy, but that talking with the many friends who’ve gone through the same experience helped them realize how frequently they occur. Wrote Zuckerberg on Facebook: “You feel so hopeful when you learn you’re going to have a child. You start imagining who they’ll become and dreaming of hopes for their future. You start making plans, and then they’re gone. It’s a lonely experience. . . In today’s open and connected world, discussing these issues doesn’t distance us; it brings us together. It creates understanding and tolerance, and it gives us hope. . .We hope that sharing our experience will give more people the same hope we felt and will help more people feel comfortable sharing their stories as well.”

Bradley Tusk, a former campaign manager for New York’s last mayor, Michael Bloomberg, is starting Tusk Ventures, a political consulting firm geared toward helping start-ups work with — and in some cases, fight against — government regulators. (Uber is among his clients.) More here.

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Jobs

Bigcommerce, a six-year-old, Austin-based start-up whose subscription-based service helps tens of thousands of companies create and manage their online stores, is looking for an SVP of business and corporate development. The job is in San Francisco.

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Essential Reads

How Google quietly revved up its very own car company.

As it rapidly matures into a Silicon Valley giant, Zenefits has also racked up a number of customer complaints over issues like software glitches and human error. Buzzfeed has the story here.

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Detours

Famous movies mashed up as “Uptown Funk.”

On the neediness of narcissists.

Bid on the props of “Mad Men.”

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Retail Therapy

Soylent 2.0. It “reaches an unprecedented level of environmental sustainability.” Yum!

Happy last day of July, everyone! Hope you’re in for a wonderful weekend. Investor-writer Semil Shah continues to guide the vessel that is StrictlyVC while Connie takes some time offline to perfect her pool game. If you’d like to reach out to Semil, you can often find him on Twitter.

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Top News in the A.M.

LinkedIn reported second quarter earnings yesterday and sales were up — but not because of a recovery in its core business. The WSJ has more here.

Apple is moving into San Francisco, starting with 76,000 square feet in the city’s South of Market neighborhood.

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Musings on LPs and Direct Investments

By Semil Shah

In the few years I’ve been able to meet and learn from limited partners or LPs (those who invest in VC funds), I have noticed an increasing desire to co-invest alongside their general partners. This makes perfect sense. If I was an LP, I’d want to co-invest, as well. Yet, in the process of doing this over the past few years, I’ve found myself repeating some warnings to LPs who have grown eager to do co-invest at the very early stages of seed.

Typically, I cite three key warnings:

One, oftentimes the founders want to meet all potential investors who will be on their cap table. Even though a VC can offer syndication to the founder, that founder may not welcome the introduction and prefer to control the process him/herself. LPs can certainly ask for insight into a GP’s processes, policies, and histories around creating co-investment opportunities, but they cannot be guaranteed. Furthermore, what if a GP has two or three LPs interested in co-investing but there’s room for only one or two. How is the GP supposed to decide?

Two, when there is a real co-investment opportunity for an LP, sometimes the LP doesn’t have the proper resources at hand (domain knowledge, or network, etc.) to independently vet and diligence the specific deal in a few days. If the LP is a family office, they may have enjoy the latitude to quickly stress-test their network and then make a yes/no call; if the LP is a fund of funds managing other institutions’ money, they may have an incentive to seek these types of deals out given their fund economics, regardless of engaging in proper diligence.

And, three, whenever someone is the recipient of an investment opportunity, one should ask: “Why I am so lucky?” In a competitive deal, I often have to fight just to wedge in, and I am not always successful. These are the investments LPs would love to participate in directly as a co-investor, but such opportunities rarely surface. Yes, there are companies that go unnoticed for months or years before breaking out and becoming a sensation, but those aren’t a monthly occurrence.

Again, if I was an LP, I would want to co-invest. After all, LPs are looking for outsize returns, just like the rest of us. More, if an LP doesn’t get in at seed, the bigger VC firms won’t create room for the LP down the road. Still, I’d welcome more conversation and debate around this topic, both from GPs and LPs alike, so that we can all learn more about best practices learned and minefields to avoid. Dangling the opportunity to co-invest may help ink a commitment, but in practice, all that glitters may not be gold.

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New Fundings

Behalf, a 3.5-year-old, New York-based online lending startup that makes short-term loans to small businesses, has raised $119 million in equity and a credit facility. Victory Park Capital has provided the credit line; MissionOG led the Series B round, with participation from Maverick Ventures and earlier backers Spark Capital and Sequoia Capital. Venture Capital Dispatch has more here.

Catawiki, the seven-year-old Amsterdam-based online auction house, has raised $75 million in Series C funding led by Lead Edge Capital, with participation from Accel Partners and Project A Ventures. Several Booking.com executives, including former CMO Arthur Kosten, also joined the round. VentureBeat has more here.

Future Home, a 2.5-year-old, Rogaland, Norway-based maker of a connected home app, has raised $1.4 million in seed funding led by Ståle Kyllingstad from IKM Invest, with participation from iPark, Ålgård Holding, and other individual investors. ArcticStartup has more here.

Jiuxian, a six-year-old, Beijing, China-based alcoholic beverage e-commerce company, has raised $80 million in new funding from undisclosed Chinese investors, according to Chinese media reports. The company had previously raised $150 million from investors, including Rich Land Capital, Oriental Fortune Capital and Sequoia Capital. More here.

Light, a two-year-old, Palo Alto, Ca.-based company behind a high-quality smartphone camera, has raised $25 million in Series B funding led byFormation 8 Hardware Fund. Additional participants in the round include StepStone Group, Bessemer Venture Partners, CRV, Foxconn’s FIH Mobile, former Motorola Mobility CEO Sanjay Jha and CrunchFund. The company has now raised at least $35 million to date. VentureBeat has more here.

Tripfactory, a 1.5-year-old, Bangalore, India-based online marketplace that offers customized trip planning and packages to users, has raised an undisclosed amount of Series A funding from Aarin Capital Partners. The Economic Times has more here.

TytoCare, a four-year-old, Israel-based telehealth platform that enables patients to perform home medical examinations and consult with a remote clinician, has raised $11 million in Series B funding led by Cambia Health Solutions. Others of its backers include OrbiMed Advisors, Walgreens, Fosun Pharma and LionBird. More here.

Ubox, a five-year-old, Beijing, China-based vending machine company with growing market share, has collected $85 million from the Carlyle Group in exchange for an undisclosed stake. TechNode has more here.

WEVR, a 6.5-year-old, L.A.-based virtual reality community and technology platform, has received $10 million from HTC — the smartphone maker that more recently branced into wearable devices and the virtual reality category — in exchange for a 15 percent stake in the company. More here.

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New Funds

Foundry Group, the 10-year-old, Boulder, Co.-based venture firm, has closed its fifth fund with $225 million, the same size of its last two early-stage funds, which were raised in 2012 and 2010, respectively.

NewSchools Venture Fund has launched an ed tech accelerator with a focus on science learning. TechCrunch has more here.

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Jobs

S3 Ventures, an eight-year-old, Austin, Tex.-based venture firm, is looking to hire a pre-MBA associate.

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Data

CB Insights looks at the venture firms that are consistently involved in the largest tech exits.

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Essential Reads

Google is quietly distributing a new version of its Glass wearable computer aimed at businesses.

Pinterest just became the first Silicon Valley company to publicly establish its diversity goals.

Uber is set to pour $1 billion into India, placing its business development efforts in the country on a par with China and signaling an escalation of its rivalry with domestic ride-sharing Ola.

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Detours

Unwrapping the “Happy Birthday” legal dispute.

Tom Cruise’s 10 greatest movie stunts, reviewed by a stuntman.

The really big one. (Gulp.)

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Retail Therapy

Cool camera bag.