• Andreessen Horowitz Bets Big on Tanium — Again

    Orion HindawiTanium, an eight-year-old, Emeryville, Ca.-based company founded by father and son David and Orion Hindawi, has landed $52 million from Andreessen Horowitz less than a year after raising $90 million from the Sand Hill Road firm.

    Somewhat amazingly, it hasn’t touched a penny of it, either, says Orion Hindawi, the company’s CTO.

    In fact, Tanium — whose security and systems management software can deliver all kinds of information about every machine and device running on a corporate network within seconds – has been profitable since 2012, and it’s growing fast, says Hindawi. Last year, it increased its total billings by 400 percent and grew its employee base from 25 to 175. It plans to employ between 500 and 600 people by year end.

    So why raise quite so much? Two reasons, says Hindawi. The company is seeing an “immense amount of opportunity” that it wants to “even more aggressively” pursue — particularly in international markets like Japan, England, and Australia, where its business has begun to take off.

    Tanium has also mapped out how much it needs to survive for three years without revenue in the case of a “black swan” event. “I like real cushions,” says Hindawi, who cofounded an earlier company with his father called BigFix that launched in 1999. BigFix survived the dot com boom and bust, eventually selling to IBM in 2010 for a reported $400 million. But the downturn also made Hindawi acutely aware of how challenging it is to survive lousy market conditions.

    Not that he needs to worry this time around, seemingly.

    Andreessen Horowitz is so taken by Tanium’s technology that despite its enormous investment in the company, it owns “substantially less than 25 percent,” says Hindawi.

    Perhaps it’s no wonder that Hindawi thinks highly of Andreessen Horowitz, too. He points to the expertise of of Andreessen partner and former Microsoft executive Steven Sinofksy, who sits on Tanium’s board. (“Usually, I’ve dealt with VCs who didn’t have direct knowledge of our space,” Hindawi says.)

    He also cites Andreessen Horowitz’s “executive briefing center,” a low-flying, 50-person unit that focuses narrowly on bringing in customers to the firm’s enterprise portfolio companies.

    It’s “one of the most amazing things I’ve ever seen,” says Hindawi, who says that half of Tanium’s customers have come from its own pipeline. The other half, he says, have come through Andreessen Horowitz.

  • AltSchool Looks to Next Round, as Demand from Parents Balloons

    maxresdefaultIf you don’t live in the Bay Area, you might not be familiar with two-year-old AltSchool, a budding network of schools founded by Max Ventilla. But the former Googler — who worked at the company both before and after it paid $50 million his startup, Aardvark — has huge ambitions to change the way we educate children. VCs like his vision, too. Andreessen Horowitz and Founders Fund led a $33 million investment in the school last year, and they’ll likely commit more, says Ventilla. (AltSchool, which is also operating on $11 million in debt from Silicon Valley Bank, will raise another round in coming months that’s likely to come “more or entirely” from insiders, Ventilla says.)

    No doubt investors are drawn to AltSchool’s “full-stack approach,” as Ventilla characterizes it. Among other ways the company is trying to reconstruct education via its tech-heavy, personalized-learning approach: students follow tailored curriculum based on their individual skills and needs. Children are spread across numerous, smaller locations than many schools, and with higher teacher-to-student ratios. Not last, AltSchool – which has three schools in San Francisco and four more in the works, including in Brooklyn — groups kids by age brackets, rather than grade levels.

    The results of this grand experiment will take some time. An outstanding question in the meantime is how the school provides investors with a venture-like return. While demand for AltSchool is high and growing — it received 1,000 applications for just 150 slots this past year — there aren’t many acquirers for a business like AltSchool. Meanwhile, Wall Street has a love-hate relationship with ed tech companies. Perhaps unsurprisingly, Ventilla says he’s already thinking about alternatives to going public. We talked last week. Here’s part of that conversation, edited for length:

    Why start a new school system from scratch?

    I’d had some amazing work experiences at Google, most recently [as the head of personalization] at Google, running a high-caliber team of about 100 engineers. I’m a startup guy, though, and so the team and I started to talk about what kind of thing we’d want to do next. I felt like I had one more startup in me – likely the last one – so we were looking for things that would be big and important and meaningful in terms of impact and relevance to our skills and experiences. And few industries are as large and in need of improvement as education.

    How did you settle on AltSchool’s very specific and different approach?

    We were fortunate as a founding team to include four educators — two with longstanding experience. We’re also operating in a wonderful space in terms of how transparent people are willing to be. I can go into any ed tech company and say, “What’s working? What’s not?” It’s a very different atmosphere in terms of openness and collaboration than anything I’ve experienced before.

    You start with first principals in an environment that you can control. We operate the schools from the real estate to the IT to the lunches that get delivered. Based on that proximity to students and parents and teachers, from whom we’re getting monthly satisfaction data on a granular level, we iterate. We’re a constant work in progress. But we think that as we scale, we’ll accelerate our rate of improvement.

    Your vision includes an expanding network of classrooms and schools, so students can move from one location to another seamlessly. Why is that important to you?

    Because how long people tend to live in one place is plummeting. Our kids will likely live in 20 different places when they’re grown.

    And AltSchool is interested in smaller spaces — so you can establish far more schools?

    Yes, onerous and justified building code restrictions are one reason. But there’s also a much more efficient real estate market for 8,000-square-foot spaces versus 100,000 square feet [the size of traditional schools], where 95 percent of the space includes shared halls, an underused gym [and so forth]. On average, we offer children 95 square feet of facility space and 70 to 75 percent of square feet of classroom. Traditional schools offer 175 square feet of facility space and just 45 square feet of classroom.

    You have several locations that right now charge families roughly $20,000 per student, a cost you plan to lower over time. But you also expect to license what you’re developing. Which will be the bigger business ultimately?

    In the long term [licensees] is what we’re charting toward. It’s hard to imagine that you wouldn’t have an order of magnitude more impact [through licensing aspects of the business]. That said, I think it’s extraordinarily important to have an expanding number of schools; it’s how we iterate and refine what we’re doing and how we’ll stay closest to the school experience.

    AltSchool has 75 employees currently, including 25 teachers, most from traditional backgrounds. Does their compensation differ much at AltSchool?

    We take their base salary and give them a meaningful but small percentage raise. They also receive a performance-based bonus and their benefits are significantly better than the schools from which they’re coming. Everyone has equity in company, too, which represents a small fraction of their compensation but is expected to become significant as they stay with the company and level up in terms of their responsibility. It could represent a life-changing financial outcome . . . which is a big a deal in these professions where nothing great could happen to you financially, [where you] pretty much have to reconcile yourself with multi-decade grind.

    That’s out of sync with the kind of 21st century entrepreneurial ideal, and there’s something odd [in thinking] that kids will learn 21st century skills from educators who aren’t given a 21st century work environment.

    What is the exit for AltSchool? Do you plan to take it public eventually?

    I’d hope that the scale and impact [we anticipate having] would justify going public, but there are alternatives to going public that the mission and business would benefit from and that would satisfy [investors’] desire for liquidity.

    Such as?

    Entirely new markets are opening up that are predicated on different mechanics and incentives. I have friends working on things that, if they were successful, would represent appealing alternatives. Also, you have this funny situation where if you go public, your investors are predictably mutual funds, pension funds, and large family offices, and you see companies just going directly to those investors. With Uber’s newest round, it’s essentially public; it raised capital from all those same people.

    A third option would be around social impact investing and social impact bonds. We’re far from being the size that could turn to those — they’re growth capital — but we’re in a space where you could tie the capital you raise to the social benefit that you’re engendering. We’re a B Corp and the whole idea is that you can have a great business and operate as a good corporate citizen, and I think that idea is very in line with nascent capital avenues and new exchanges. Some of what’s happening is in stealth, but there’s lots of it going on.

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

  • Distelli Skips the Seed Round to Land a Powerful Board Member

    Rahul SinghIn recent years, there’s been no shortage of chatter about seed funding, from the alleged benefits of seed rounds to their ballooning size. (Clinkle, anyone?)

    Distelli, a two-year-old infrastructure automation company that simplifies code deployment and server management for developers, decided to skip past it all to raise $2.8 million in Series A funding led by Andreessen Horowitz, a round that sees general partner Scott Weiss joining Distelli’s board.

    The decision makes sense given the broader context. Distelli was founded by Rahul Singh, the fourth engineer on the Amazon Web Services team. He spent nine years building the platform services and infrastructure that powers the cloud computing platform, and he’s accustomed to finding ways to move things forward as quickly as possible.

    In fact, Singh — who says Amazon’s developers push out new code every 11 seconds – not only credits Amazon’s growth with its own “move fast” culture, but he says Amazon inspired him to make it easy for any developer to iterate just as quickly. Toward that end, Distelli enables engineers to communicate with every server in their environment to learn what’s running on each of them, as well as update their code or roll it back, and track every change in the process.

    It isn’t a brand-new concept. Distelli, which is based in Seattle and employs six people (including two other former Amazon engineers), is going up against a number of competitors. Among them are Chef, a company that allows its users to automate how they build, deploy, and manage their infrastructure, and Puppet Labs, which also develops IT automation software. Both have raised many tens of millions of dollars in venture capital, too.

    Singh argues that Distelli has a much bigger vision than other startups and that Distelli’s biggest competition at the moment are the many software teams still building their own infrastructure automation systems internally.

    Still, says Singh, it was important to have someone like Weiss – who cofounded the email security company IronPort Systems back in 2001 – in Distelli’s camp as soon as possible.

    Indeed, skipping over seed funding had “little to do with equity and valuation,” he explains. “The real significance of doing an A round was that angel rounds often don’t include board seats and I want a great partner to execute because the opportunity is so huge.”

    As for the size of the round, which is modest by recent standards, Singh observes that “just as raising too little can be a problem, raising too much can be a problem, too. I wanted to ensure we raised enough money to reach our next set of goals and to achieve what we want in the next 18 months — without getting complacent.”

  • The “15” Meme Fallacy

    magic-numberBy Greg Gretsch

    StrictlyVC recently observed that a 10-year-old study has done much to inform how venture capitalists now behave. That data found that between the mid ‘80s and mid 2000s, about 15 tech companies are founded each year that account for 97 percent of all public returns. It was popularized around 2009, when Marc Andreessen and Ben Horowitz – who were launching their venture firm at the time — began discussing it widely with reporters.

    Yet the idea that only 15 tech companies each year go on to produce $100 million in revenue and therefore “matter,” has never sounded right to me. It doesn’t square with my own experience, having led Sigma’s investment in three companies that reached more than $100 million in revenue per year: EqualLogic, which sold to Dell for $1.4 billion; Responsys, which went public, then sold to Oracle for $1.6 billion; and oDesk, which recently merged with Elance and remains private. I’m working with several more companies now that I’m confident will reach that very important milestone.

    So what? Well, the problem isn’t the belief that a small number of companies generate the lion’s share of venture returns in any given year. That’s been the conventional wisdom for years. The problem arises when this belief is taken the next few steps. In other words: If there are only 15 companies founded each year that matter, then in order to be a good firm you have to be an investor in those 15 companies (or many of them), then therefore (and this is where many firms go off the rails), it doesn’t matter what you pay for them.

    Overlooked in this march toward the “winner’s circle” is the time required to build a company to $100 million in revenue. It took EqualLogic roughly 6 years, Responsys roughly 12 years, and oDesk a decade. The aforementioned research covered a span of time through the mid 2000s. All of my $100 million companies were founded in those cohort years but reached the magical $100 million mark in more recent years, meaning they wouldn’t have been in that 15-per-companies-per-year estimate.

    To believe that such a narrow number of companies is all that matters doesn’t make intuitive sense, either. According to Morgan Stanley, there were more than 20 venture-backed tech IPOs each year between 2001 and 2014. It’s safe to assume the vast majority of those companies mattered to their investors. The same is surely true of the countless great M&A transactions we’ve seen over the same period, like WhatsApp, Nicira, Instagram, and YouTube.

    Worth noting: None of the aforementioned M&A deals got to $100 million in revenue on their own.

    This brings me to another point. While it’s true that venture investing follows a power law — meaning that a small percentage of companies each year represent the overwhelming percentage of gains from that year — you can still generate fantastic returns without being in those monster hits.

    Even if you take out the “15”, there will still be many 10x exits that are just making up for the companies that lost everything for that vintage year. And any venture investor would be happy to invest in a 10x company whether or not it was among those that generated the bulk of the returns in venture for its vintage.

    The biggest problem in investors’ religious adherence to the 15/$100 million meme is that it causes bad behavior. When every investor is chasing that mythical yearly batch of 15 companies, the resulting competition causes valuations for those anointed companies to skyrocket. That’s bad for investors who often end up investing at valuations greater than the public market is willing to give these companies (see Groupon, Zynga, et al.). It’s also bad for companies. Those for which capital is cheap and easily accessed are at greater risk of making non-economical business decisions that create business models that rely on increasing amounts of cheap capital (see Fab, Box.net, et al).

    Bill Gurley put it best when he told the WSJ: “Excessive amounts of capital lead to a lower average fitness because fitness, from a business standpoint, has to be cash-flow profitability or the ability to generate cash flow. That’s the essence of equity value . . . [and] we get further and further away from that in the headiest of times.”

    At some point someone will do the definitive piece of academic research on the topic. Unfortunately, given the long time required to scale most companies to $100 million in revenue, the mature cohorts will be so far out of date that they won’t be relevant to the then-current investing climate.

    Greg Gretsch is a managing director at Sigma West.  Follow him @greggretsch

  • StrictlyVC: December 1, 2014

    Welcome back, everyone! We hope you had a terrific break.

    (Psst, web visitors, this version of today’s email is easier to read.)

    —–

    Top News in the A.M.

    It’s Cyber Monday, if you didn’t notice from the dozens of emails clogging your inbox and Twitter stream today. Amazon gives Wired a peek at the robots driving its “epic” Cyper Monday operation.

    At least five new movies from Sony Pictures are being downloaded in high volume via copyright-infringing file-sharing hubs in the biggest piracy incident since July. Variety has more here.

    —–

    How Many Tech Companies Break Out Each Year? And Where?

    In recent years, it’s become the conventional wisdom that roughly 15 companies each year go on to produce all the returns in venture capital. Marc Andreessen was the first to make a very public case for the approach, citing the research of Andy Rachleff, who cofounded the venture firm Benchmark and who today teaches at Stanford and is the executive chairman of the investment firm Wealthfront.

    “Basically, between roughly the mid-‘80s and the mid-2000s—a good cross-section of time across a couple of different cycles—what [Rachleff] found is that there are about 15 companies a year that are founded in the tech industry that will eventually get to $100 million in annual revenue,” Andreessen told me when Andreessen Horowitz was closing its first fund in 2009. “His data show that they [account for] 97 percent of all public returns, which is a good proxy for all returns. So those are the companies that matter.”

    Rachleff’s reasoning explains much about how Andreessen Horowitz has operated from the start. Persuaded by the rise of Andreessen Horowitz, Rachleff’s research has also found its way into the thinking of every other top and second-tier venture firm (not to mention many hedge funds and mutual funds).

    Interestingly, it’s hard to prove whether or not Rachleff’s findings still apply to today’s market. He never published the research, which he’d prepared for a speech. And he lost all of the data when his computer’s hard disk crashed in 2006, he once told me. When earlier this month, I asked him if he thinks today’s winner’s circle has changed in size, given falling startup costs and more ubiquitous broadband penetration (among other factors), Rachleff politely offered that he didn’t have time to explore the topic.

    There is, of course, the oft-cited research of Aileen Lee of Cowboy Ventures, who looked at breakout companies last year and concluded that just four “unicorns” — or tech companies that go on to be valued at $1 billion or more — are founded each year. But Lee’s much newer dataset centered on U.S.-based tech companies that were launched in January 2003 and afterward. And comparing “unicorns” to tech companies that produce at least $100 million in revenue isn’t necessarily an apples-to-apples comparison.

    Unfortunately, Lee didn’t respond to a recent request to discuss whether her findings and those of Rachleff are complementary or at odds.

    More recent research suggests that Rachleff’s research holds up, though. In an 11-page paper written last year, economist Paul Kedrosky found “there are there are, on average, fifteen to twenty technology companies founded per year in the United States that one day get to $100 million in revenues.” He added that the “pace at which the United States produces $100-million companies has been surprisingly stable over time, despite changes in the nature of the U.S. economy.” (It’s highly remarkable, in our opinion.)

    Kedrosky added that the biggest “hidden changes” in the way U.S. tech giants are created is where they are founded, suggesting that if investors with big funds are going to chase after breakout companies, they’d be smart to cast a net far beyond Silicon Valley. Indeed, according to him, of the 15 to 20 tech companies to break out each year, just four, or 20 percent, are now founded in California, “usually.” In the 1990s, meanwhile, California’s share of $100-million technology companies was roughly 35 percent.

    —–

    New Fundings

    Bowery, a 1.5-year-old, New York-based company whose cloud service enables programmers to quickly create developer environments, then upgrade and share them with co-workers in real time, has raised $1.5 million in a convertible note. Investors include Betaworks, Bloomberg Beta, BOLDstart Ventures, Deep Fork Capital, Google VenturesHomebrew, Magnet Agency, RRE Ventures and SV Angel. General Catalyst Partners’s Rough Draft Ventures and First Round Capital’s Dorm Room Fund, which both previously invested $50,000 in February, also contributed along with private investors Naveen Selvadurai and Ryan Holmes. Venture Capital Dispatch has more here.

    Carousell, a two-year-old, Singapore, China-based mobile marketplace that helps facilitate the sale of goods between people, has raised $6 million in funding led by Sequoia Capital. Earlier backers Rakuten VenturesGolden Gate Ventures, 500 Startups and serial entrepreneur Darius Cheung also participated in the round. The Economic Times has more here.

    ChainSync, a two-year-old, London-based scalable franchise management system, has raised $500,000 in seed funding from one, unnamed angel investor. The company says it has 500 franchise users.

    Cirba, a 15-year-old, Toronto, Ontario-based company that sells infrastructure control software for private cloud, virtualization and software-defined environments, has raised $6.2 million from investors, shows anSEC filing. The company’s backers include the Washington, D.C.-based firm Updata Partners and Tandem Expansion Fund of Montreal.

    Glide, a 1.5-year-old, New York-based company whose app combines video chat with texting, has raised $20 million in Series B funding led by Marker LLC, with participation from Two Sigma Ventures, Menlo Ventures and other, earlier investors. The company had raised two previous rounds of undisclosed amounts, shows Crunchbase.

    Lazada, a 2.5-year-old, Kuala Lumpur-based online mall that was incubated by Rocket Internet, has raised roughly $250 million in new funding led by Singapore’s Temasek Holdings, with participation from earlier backers Rocket Internet, Kinnevik, and Verlinvest. The company, which has taken off in Southeast Asia, has now raised $436 million to date, shows Crunchbase.

    Narrative Science, a nearly five-year-old, Chicago-based company whose software can sift through data to automatically create written internal reports and the like for its corporate clients, has raised $10 million in fresh funding, reports Recode. The round was led by one of the startup’s newest customers, the United Services Automobile Association. Earlier investors Sapphire Ventures, Jump Capital, and Battery Ventures also joined the round, which brings the company’s total funding to $32 million.

    Pieris, a 13-year-old, Munich, Germany-based biotech, has raised €6.6m ($8.2 million) from numerous life sciences venture firms, including earlier backers Gilde Healthcare Fund, OrbiMed, Global Life Science Ventures, BioM Venture Capital, BayTech Venture Capital and Ally Bridge Group. Pieris had previously raised at least $45.9 million, according to Crunchbase.

    QLL, a seven-year-old, Taipei-based company that makes educational mobile apps, has raised $450,000 in funding led by B Dash Ventures, with participation from Incubate Fund, Pinehurst Advisors, Viling, and Coent Venture Partners. TechCrunch has more here.

    Socrata, a seven-year-old, Seattle-based cloud software company whose open-data platform is used at all levels of government to present information for the general public, has raised raised $30 million in new funding, shows an SEC filing. The company had previously raised $24.5 million, including from Morgenthaler Ventures, Frazier Technology Ventures, In-Q-Tel, and OpenView Venture Partners.

    Vox Media, a four-year-old, New York-based publisher with a fast-growing portfolio of online lifestyle and news brands, including The Verge and Eater, has raised $46.5 million in new funding from General Atlantic in a deal that values the company at $380 million, reports Dealbook. The company has now raised $107.6 million altogether, shows Crunchbase. Its previous backers include Comcast Ventures, Khosla Ventures, Accel Partners, Ted Leonsis, and Allen & Co.

    —–

    New Funds

    You might not guess that Hasso Plattner Ventures had outside investors, but apparently, it did. Indeed, the nine-year-old firm, named after the billionaire cofounder of the software giant SAP, has just announced it won’t raise another fund with the help of limited partners but that it will instead rely solely on the funds of Plattner himself, whose fortune has been estimated at roughly $8 billion. The outlet Unquote has more here.

    Middle East Venture Partners, a Beirut, Dubai, and Silicon Valley-based venture capital firm, has begun raising a $30 million pool to invest in between 10 and 15 companies from the United Arab Emirates in the next three years, reports Arabian Business. The firm, which is currently managing $75 million in assets, will be looking specifically for e-commerce, “edutainment,” and e-payment start-ups to add to its existing portfolio of 25 tech companies.

    Tiger Global Management has closed on $2.5 billion in new funding, shows an SEC filing. The money comes just eight months after Tiger closed on a separate, $1.5 billion pool and will likely worry those who were already dismayed about the amount of money flooding into late-stage companies. The money is reportedly being split between a Global Internet Opportunities fund that will launch next month with $1.5 billion, and a $1 billion Global Long Opportunities fund.

    —–

    IPOs

    LendingClub, the seven-year-old, San Francisco-based, online peer-to-peer financing company, has boosted the size of its planned IPO to $650 million, after initially looking to sell $500 million worth of stock, reports the Financial Times. The company will likely set a valuation range that starts at $3.8 billion, say the report. LendingClub’s biggest institutional shareholders are Norwest Venture Partners, which owns 16.5 percent of the company; Canaan Partners, which owns 15.9 percent; Foundation Capital, which owns 12.8 percent; and Morgenthaler Venture Partners, which owns 9.2 percent.

    Momo, a three-year-old, Beijing, China-based company that makes a popular location-based services instant messaging application, expects to raise $256.6 million from a planned stock offering, according to an updatedSEC filing that shows it plans to price its American Depositary Shares between $12.50 and $14.50 per share. The company had registered to go public early last month.

    Outbrain, an eight-year-old, New York-based provider of “native ads,” filed confidentially with the SEC earlier this month, according to VentureWire sources. Outbrain is expected to seek a valuation of around $1 billion,reports the the outlet. The company has raised roughly $100 million to date, including from Rhodium, GlenRock Israel, Lightspeed Venture Partners, Carmel Ventures, HarbourVest Partners, Gemini Israel Ventures, and Index Ventures.

    —–

    Exits

    Microsoft appears to have acquired Acompli, a mobile email application that helps customers quickly find emails in their inboxes, reports TechCrunch. The 1.5-year-old, San Francisco-based company has raised at least $7.3 million from investors, shows Crunchbase. Its investors include Felicis Ventures, Harrison Metal, and Redpoint Ventures.

    NSynergy, an 11-year-old, Melbourne, Australia-based Microsoft-centric cloud business focusing on Office365 implementations, has been acquired by the 11-year-old, subscription software licensing firm Rhipe (also based in Melbourne) in a $23.5 million deal. More here.

    PasswordBox, a two-year-old, Montreal-based maker of digital identity management software, has been acquired by Intel for undisclosed terms. The company had raised at least $6 million from investors, including Real Ventures, OMERS Ventures, and individuals Lee Linden, Mark Britto, and Greg Wolfond, shows Crunchbase. TechCrunch has more here.

    —–

    People

    Former Hewlett-Packard CEO Carly Fiorina is exploring a run for president and been talking privately with potential donors, recruiting campaign staffers, and courting grass-roots activists in early caucus and primary states. The Washington Post has the story here. Fiorina, a Republican, has never held office; she ran unsuccessfully for Senate in 2010.

    Since his death in 2011, former Apple CEO Steve Jobs has won 141 patents. That’s more than most inventors win during their lifetimes, notes Technology Review. More here.

    Billionaire Vinod Khosla’s big plans for biofuels have mostly failed to take off. The Washington Post lingers on some of the biggest misfires, including KiOR, a biofuel outfit that filed for bankruptcy early last month, leaving behind 2,067 creditors, including the state of Mississippi, which had given KiOR a $75 million, 20-year, no-interest loan after the company assured officials that it would invest $500 million in the plant and create 1,000 jobs by December 2015.

    Uber has concluded an investigation of New York City general manager Josh Mohrer for alleged privacy violations and has “taken disciplinary actions” against him, reports Slate. Uber began looking into Mohrer after a BuzzFeed journalist reported that he’d accessed her Uber travel data without her permission multiple times. Uber has declined to comment on any specifics of the “disciplinary actions” but says Mohrer will retain his role.

    Amit Srivastava has joined the Montreal-based firm Cycle Capital Management as a senior partner. Srivastava was formerly the managing Partner and CEO of Entrepia Ventures. Prior to joining Entrepia in 2001, he worked for seven years at JP Morgan Chase.

    —–

    Happenings

    The Post.Seed Conference takes place tomorrow in San Francisco, where numerous high-profile investors are set to speak on a wide range of early-stage financing issues, including Chris Dixon, Paul Martino, Keith Rabois, Naval Ravikant, Ryan Sarver, Semil Shah and Hunter Walk. (I’ll be there, too, moderating a panel.) More information here.

    —–

    Job Listings

    GSV Capital, the publicly traded firm that invests in private venture-capital backed companies, is looking for a partner to “manage the firm’s capital raising initiatives.” More here.

    —–

    Essential Reads

    For younger Indians, buying a car is seen as a “total waste of money,” a local IT consultant tells Businessweek in an interesting piece about the rise of car-sharing services in the country, which has long been plagued by traffic congestion and poor public transportation options.

    Intel will be “inside” your Google Glass beginning next year, reports the WSJ.

    —–

    Detours

    Power doodles.

    Anamorphic installations made of random objects.

    The science of politely ending a conversation.

    —–

    Retail Therapy

    Gravity-defying bookshelves.

    Perfect bacon bowls. (A real product.)

    A company boldly takes ugly Christmas sweaters to the next level.

  • How Many Tech Companies Break Out Each Year? And Where?

    breakout cosIn recent years, it’s become the conventional wisdom that roughly 15 companies each year go on to produce all the returns in venture capital. Marc Andreessen was the first to make a very public case for the approach, citing the research of Andy Rachleff, who cofounded the venture firm Benchmark and who today teaches at Stanford and is the executive chairman of the investment firm Wealthfront.

    “Basically, between roughly the mid-‘80s and the mid-2000s—a good cross-section of time across a couple of different cycles—what [Rachleff] found is that there are about 15 companies a year that are founded in the tech industry that will eventually get to $100 million in annual revenue,” Andreessen told me when Andreessen Horowitz was closing its first fund in 2009. “His data show that they [account for] 97 percent of all public returns, which is a good proxy for all returns. So those are the companies that matter.”

    Rachleff’s reasoning explains much about how Andreessen Horowitz has operated from the start. Persuaded by the rise of Andreessen Horowitz, Rachleff’s research has also found its way into the thinking of every other top and second-tier venture firm (not to mention many hedge funds and mutual funds).

    Interestingly, it’s hard to prove whether or not Rachleff’s findings still apply to today’s market. He never published the research, which he’d prepared for a speech. And he lost all of the data when his computer’s hard disk crashed in 2006, he once told me. When earlier this month, I asked him if he thinks today’s winner’s circle has changed in size, given falling startup costs and more ubiquitous broadband penetration (among other factors), Rachleff politely offered that he didn’t have time to explore the topic.

    There is, of course, the oft-cited research of Aileen Lee of Cowboy Ventures, who looked at breakout companies last year and concluded that just four “unicorns” — or tech companies that go on to be valued at $1 billion or more — are founded each year. But Lee’s much newer dataset centered on U.S.-based tech companies that were launched in January 2003 and afterward. And comparing “unicorns” to tech companies that produce at least $100 million in revenue isn’t necessarily an apples-to-apples comparison.

    Unfortunately, Lee didn’t respond to a recent request to discuss whether her findings and those of Rachleff are complementary or at odds. More recent research suggests that Rachleff’s research holds up, though. In an 11-page paper written last year, economist Paul Kedrosky found “there are there are, on average, fifteen to twenty technology companies founded per year in the United States that one day get to $100 million in revenues.” He added that the “pace at which the United States produces $100-million companies has been surprisingly stable over time, despite changes in the nature of the U.S. economy.” (It’s highly remarkable, in our opinion.)

    Kedrosky added that the biggest “hidden changes” in the way U.S. tech giants are created is where they are founded, suggesting that if investors with big funds are going to chase after breakout companies, they’d be smart to cast a net far beyond Silicon Valley. Indeed, according to him, of the 15 to 20 tech companies to break out each year, just four, or 20 percent, are now founded in California, “usually.” In the 1990s, meanwhile, California’s share of $100-million technology companies was roughly 35 percent.

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  • A Custom Apparel Company with Big Ambitions Raises $35 Million

    teespringInto ironic T-shirts? You aren’t alone. In fact, the market is so robust that Teespring, a two-year-old company that helps anyone turn their idea for a T-shirt (or hoodie) into a real product, has just raised $35 million in Series B financing from Khosla Ventures. Andreessen Horowitz, which had plugged $20 million into the company earlier this year, also participated in the round.

    It seems like an awful lot of money for a simple apparel business, but Providence, R.I.-based Teespring says it has big ambitions to move into numerous verticals. “T-shirts are to Teespring as books were to Amazon,” says the company’s co-founder and CEO, Walker Williams, a Brown University grad who originally started the company to help save a college bar.

    Indeed, the general idea is to help anyone with the inclination become an entrepreneur with as little effort as possible.

    Here’s how it works today: Users simply download a picture of their design; Teespring handles the rest, from manufacturing to fulfillment to customer service. Teespring outsources some pieces of the process but going forward, it plans to manage more of it internally. For example, it already has its own customer service department; to further support its ambitions, the company is building out a 105,000-square-foot manufacturing facility in Hebron, Kentucky that it says should significantly increase its manufacturing and logistics capabilities.

    Teespring is still keeping its revenue close to the vest, but it claims that it has already shipped six million products to more than 80 countries and that 1 in 75 people in the U.S. have purchased a Teespring tee in the past year.

    Williams also says that of the “thousands” of vendors and individuals using the service to make their products, “hundreds” of them are “making six figures” and that more than 10 are making in the millions of dollars a year.

    On average, he adds, users pay Teespring between $8 and $10 per T-shirt, and between $14 and $18 per hoodie depending on the print design, the fabric, and the number of ink colors the unit requires. (That includes Teespring’s margin.) From there, users can sell the goods for whatever they want.

    Today, Teespring employs 170 employees. Once it gets its new facility in Kentucky up and running, says Williams, it will be adding 300 more jobs to the payroll.

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  • Louis Beryl’s Big Ambitions at Earnest

    louisberyl_1342762481_41Earnest is a startup that provides small loans to people based on their earning potential. But its marketing may be more savvy than earnest.

    For now, the company is selling itself as an alternative for people who have trouble nabbing an affordable loan. The big difference between Earnest and traditional lenders is that Earnest looks beyond credit history to where a person attended school, what she studied, and her current job and income. The proposition isn’t so unlike that of another venture-backed startup, Upstart, which also recently jumped into the small loans business, though Earnest asks applicants for much more information, including access to their checking, savings, investment, and retirement account balances. (Both companies employ language about giving “financially responsible” clients the rates they “deserve.”)

    It’s an intriguing proposition. It’s also mostly a teaser, unsurprisingly. Earnest says it can afford to charge lower interest rates than most because its technology has lowered its own costs. But the loans that Earnest offers customers — 5.5 percent interest on a one-year loan and 6.5 percent for a two-year loan of up to $20,000 – aren’t just hard to beat; they’re too low margin for Earnest to produce a meaningful return for the investors who’ve given the year-old company $15 million (money, by the way, that Earnest is partly using to extend to new customers). To learn more about what’s going on — and what’s next — I talked yesterday with Earnest founder Louis Beryl, a Princeton and HBS graduate who has worked on Wall Street and at Andreessen Horowitz. Our chat, edited for length, follows.

    You spent a year-and-a-half at Andreessen Horowitz before founding Earnest. What were you doing exactly, and how did it lead to this company?

    When I was coming out of [HBS], I was hired as an internal data scientist to look across [Andreessen Horowitz’s] portfolio at how we were making investments [such as] looking at how a team’s make-up changes as it grows. [Andreessen Horowitz] wants to help that great founder build a great company, and being able to anticipate in advance who [startups] need to bring on and in what capacity [is a big part of its value add].

    I also did more traditional VC stuff, including looking at financial technology companies. As it relates to Earnest, I started thinking: If you were going to build a financial services company from scratch, using data to understand people, how would you do that?

    Earnest says it can lend to someone at a very low rate because that person is so low risk. It doesn’t take origination fees, either. So are you counting on zero defaults, or are your products basically loss leaders, or both?

    We’re making loans to very credit worthy, very responsible [customers] so yes [to your question about defaults]. We also plan to expand with [clients] over time. If you’re someone who takes a $15,000 to $20,000 loan out of graduate school, we hope to provide other products for you as your situation changes. We’re laser focused on the products we’ve just launched, but we’re going to listen and if [our customers] want credit cards, we’ll move into that. If they want home or car or student loans or a deferral product because they have low cash flow today . . . we’ll move into that.

    Are you interested in the financial advisory business, as with a Wealthfront? You’re asking for an awful lot of financial information from your potential customers.

    We’re not interested in Wealthfront’s business, though we think we’d be complementary to them and maybe [attract] the same types of people.

    Hundreds of people come to our site and enter their information on a regular basis. You could choose not to give over much information, but a lender who doesn’t understand you well has to [charge you more interest]. We say that if you deserve better, we’ll price you at a lower rate than anything in the market.

    This is a low-margin business, that’s a fact. . . But we’re not here trying to make the highest margin on every client . . . We’re similar to Amazon in that we’re always thinking how we can deliver the lowest-cost product that delivers happiness to consumers every day. This is a very mission-driven organization. We believe we’re building the modern bank of the next generation.

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  • Accel Partners Backs Father-Son Team in Sookasa

    SookasaSookasa, a 2.5-year-old, 12-person startup in San Mateo, Ca., is taking the wraps off its business today, as well as unveiling $5 million in Series A funding led by Accel Partners, which it closed on last August.

    No doubt Accel was attracted to the startup’s technology, which promises to dramatically simplify the protection of sensitive files across popular cloud applications and mobile devices. As services like Dropbox and Box become increasingly ubiquitous and more employees use them to share files with each other and people outside their companies, businesses in particular need a better way to manage and protect that data. Sookasa, a cloud-based offering, says it make the process of encryption so easy that even a sole practitioner can get up and running as easily as he or she can sign up for Dropbox itself.

    Yet Sookasa is interesting for another reason. In addition to cofounders Madan Gopal and Chandra Shetty — both senior engineers from Cisco, formerly — Sookasa’s founders are a father and son who serve as CTO and CEO, respectively. Israel Cidon was long a professor at Technion in Israel; he also founded four prior companies, including Actona Technologies, acquired in 2004 by Cisco. Asaf Cidon, a PhD candidate at Stanford, spent a year working in R&D at Google after spending three years in the intelligence section of the Israel Defense Forces.

    Asaf Cidon talked with StrictlyVC the other day about the company and what it’s like to work with his dad.

    You want to allow professionals in regulated industries, like health care, finance and legal, to use their favorite cloud services in a secure way. How is your service different from what already exists?

    The issue with other types of solutions is that they’re only good as long as you’re accessing the cloud through a company computer or company network. If you’re sharing with someone outside of company, they can’t access the files. We encrypt files anywhere they go.

    What was the impetus for the company?

    Dad and I are both geeks who’ve been mucking around for years on crazy ideas and we were [storing] a lot of our documents on Dropbox. And we asked ourselves: Where is our data? Where are all the copies of these files and who can access them? What we found was those are really hard questions to answer. These services keep a lot of different copies and it isn’t clear who can access them. It’s an interesting problem to address for consumers, but even more so for businesses, where you can get fined $5 million for a HIPAA breach, for example.

    Not many entrepreneurs launch companies with their fathers. What it’s like?

    There probably aren’t many cases where founders have started a tech business with family members — though Mendel Rosenblum cofounded VMWare with his wife [Diane Greene], which is an even more precarious situation. [Laughs.] My dad and I really get along, though. We’re also very different. He’s a professor who’s really interested in hard problems; he’ll obsess for a week over [some aspect of] encryption architecture. I love the business side and how we find the right business positioning and sales, which I didn’t always know I would.

    You raised $5 million in Series A funding in August, after raising $1.7 million in seed funding in 2012. Why announce it now?

    First, we had to go through extensive security and HIPAA audits by [the audit firm] Praetorian, to [ensure we meet all the technical safeguard requirements]. We also wanted to wait until the product was simple enough for the public to use. We have customers, but an encryption product isn’t necessarily easy to explain to a doctor or nurse or even a lawyer. Now the product is in a state where you put your folder in Dropbox and it’s encrypted, it’s done. You don’t even know it’s there.

    For inquiring minds, will be you be in the market for more funding this year?

    We’re not right now looking for a Series B, but we’ll need funding to expand. We’ll probably need inside sales [staff] pretty soon. With our ambitions, we’ll be going through at least one more round — to put it mildly.

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  • StrictlyVC: March 4, 2014

    Hi, good Tuesday morning, everyone!

    Quick note: If you’ve signed up for StrictlyVC in recent days and aren’t receiving it, let me know at connie[at]strictlyvc[dot]com and I’ll add you manually. (Looks like a back-end update might have zapped some of you.)

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    Top News in the A.M.

    Facebook is reportedly in talks to buy drone maker Titan Aerospace to extend Internet access to parts of the world that still go without it.

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    Ben Horowitz on the “Irrational Desire” Needed to Succeed

    For people with Andreessen Horowitz fatigue, things are about to get worse with the publication of co-founder Ben Horowitz’s new bookThe Hard Thing About Hard Things.

    Here’s the hard truth: the book is outstanding. This reporter has never met a business tome she could finish; not so with Horowitz’s newest effort, which manages to be equal parts entertaining, harrowing, and instructive as both a business manual and as an autobiography. Even the pacing is excellent, helped in part by both emails and exchanges, like this brief conversation with Horowitz and longtime partner Marc Andreessen as their company, LoudCloud, appeared to be at death’s door: “Do you know the best thing about startups?” Andreessen asks Horowitz. “What?” “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.”

    Horowitz talked with StrictlyVC about his new book late last week. Our conversation has been lightly edited for length.

    Some authors hire research teams to help with their books. Did you have support in writing this?

    I wrote it. It was a hard thing, but I kind of had to do it. [Freelance editor Carlye Adler, who recently co-authored a book with Yahoo’s chairman, Maynard Webb] edited it, so she kind of fixed a few things like grammar. The most corrections [owed to] my general tone, which was a little casual for the book. [Adler tweaked things] so it wouldn’t sound too street. [Laughs.]

    What made you think, okay, next month, I’m going to sit down and start work on this thing?

    It was combination of stuff. I kind of had this concept in my head, but the problem with management advice is that it’s highly related. Management is very dynamic, very situational, so any advice you give is based on your [experience]; it’s not general advice. People try to generalize it — and I try to generalize it, too — but without knowing where it comes from it’s not nearly as useful. So I thought the stories about where it came from and what I got out of it [would be helpful]. I had been planning to publish them [as blog posts]. But after [publisher] Hollis Heimbouch at Harper Collins found me on Facebook, I thought it might work better as a book.

    You’ve said the book’s proceeds will go to the American Jewish World Service to support women’s rights globally. Does that include your advance and royalties? For some perspective, can you share how much you were offered to write this book?

    The contract is confidential, but yes, it’s all going to AJWS.

    How long did it take you to write the book?

    It’s funny because when it first came up, I like was like, “I need to take a little time off to do this.” And everybody immediately said, “No. You cannot. You have to be here.” So it took a little longer than I would have liked, a little over a year. It was definitely a nights and weekends kind of thing, and I’d find some time in the day. But it was good because I remembered stuff in bits and pieces. There’s a story about [LoudCloud’s struggle to go public], when my wife was sick [with an extreme allergic reaction], and that was such a traumatic experience, I’d sort of blacked it out in my memory; it kind of [came back to me] late in the process.

    You have a lot of rich, detailed material in the book – dialogue, emails. Did you solicit help from your friends and acquaintances?

    Carlye helped me quite a bit with this. I’d made a list of all the people I’d worked with over the years, and she interviewed them about their experience and some of [the book material] came out of those interviews.

    The second half of the book provides pretty concrete advice for operators in a wide variety of tricky situations, though you don’t spell out how to engender loyalty. Many people from your past companies – John O’Farrell, Scott Kupor, Marc Cranney – wound up at Andreessen Horowitz. What’s the trick?

    If you really believe in the people who are working in the company and you believe they can be more than they can be — even more than they themselves think they can be — that comes through. And then if they grow [into that expectation], it becomes a very strong bond.

    I did an attrition survey at Netcape [Horowitz was put in charge of its enterprise Web server product line at age 29], and people leave companies for two reasons: People either hate their manager – that’s number one – or they’re just not growing or developing. Training is important, but it’s really about what the CEO believes about you. If the CEO doesn’t believe in what you can become, it’s hard for you to become it.

    When it comes to being a great CEO, what would you say are the top three qualities in order of importance?

    The number one thing is you have to have an irrational desire to build something. Any kind of rational reason for being in it gets pretty screwed up over time, because you end up in very bad situations now and again. I’d say the second quality would be the ability to find your courage at some point — the ability to stand up to a lot of pressure.

    And not quitting is probably number three. I think the only reason I stayed [with Opsware, which Horowitz essentially yanked from the ashes of LoudCloud and eventually sold for $1.6 billion] is that I didn’t quit; I stayed at it long enough that it worked out.

    You recently published an anecdote on your blog, which didn’t make it into the book, about how you avoided an options backdating scandal by not taking the advice of a well-regarded CFO you’d hired.

    Yes. People called the character and harassed her. She was actually grateful for the way I portrayed [what happened].

    Is there any danger that other characters in your new book will make a fuss? You write about one executive who was “born in the oilfields of Oklahoma, graduated from West Point, and was in charge of anyone who touched any servers at EDS,” which was one of your biggest customers at the time. We later learn that he lingers at airport bars to escape his work and family.

    I tried to run a lot of stuff by as many people as I could, because I [didn’t want to upset people]. I’ll bet I missed some, though. I think my biggest fears are that, and the acknowledgements. I know I didn’t acknowledge people who were a huge help, and I just don’t know how to go back [and do that now].

    How much of your adventures at LoudCloud and Opsware would you say owe to luck versus quick, reactive decision making?

    Luck played a major role. We had so much bad luck early – an overwhelming amount of bad luck – beginning with the whole change in macroeconomics [LoudCloud raised tens of millions of dollars months before most of its customers were done in by the 2000 dot.com implosion.] Then we had tremendously good luck [i.e., Opsware’s eventual sale to Hewlett Packard]. There’s no question that if a couple of things had gone a different way, we wouldn’t have made it.

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    New Fundings

    Appian, a 15-year-old, Reston, Va.-based company whose platform helps enterprises to build their own customer applications, has raised $37.5 million in Series B funding from New Enterprise Associates, $35 million of which will go toward repurchasing shares of common stock, reports the WSJ. Appian had raised an earlier, $10 million, round from Novak Biddle Venture Partners; it still holds a stake in Appian, says the company’s CEO.

    Boqii, a 6.5-year-old, Shanghai-based e-commerce platform for pet owners, has raised $25 million in Series B financing led by an undisclosed U.S.-based firm; earlier investors Goldman Sachs and Jafco Asia also participated in the funding. China’s pet industry stood at roughly $6.5 billion in 2012, compared with the $53.3 billion U.S. pet market, according to the China Money Network.

    Caspida, a new, Palo Alto, Ca.-based cyber security startup, has raised $9.5 million from True Ventures and Redpoint Ventures, shows an SEC filing. The company was cofounded by Sudhaker Muddu, who sold his last company, Cetas, to VMWare in 2012.

    Invuity, a 10-year-old, San Francisco-based maker of advanced medical devices designed to improve access and visualization in minimally invasive surgeries, has raised $36 million in Series E funding led by HealthCare Royalty Partners. Earlier investors Valence Life SciencesInterWest Partners, and Kleiner Perkins Caufield and Byers also joined the round, along with individual investors. The financing is a combination of $21 million in equity and up to $15 million in debt.

    Mashable, the 8.5-year-old, New York-based media company, has added $700,000 to its Series A round from Tribune Digital Ventures, bringing total funding for the round to $14 million. Others of its investors includeUpdata PartnersNew Markets Venture PartnersSocial Starts.

    Mela Artisans, a 3.5-year-old, Boca Raton, Fla.-based online market for decor, jewelry and more from artisan clusters in cities like Uttar Pradesh and Rajasthan in India, has raised $3 million from the social venture firm Aavishkaar Venture Managementreports the Economic Times.

    Speek, a 1.5-year-old, Ashburn, Va.-based company focused on simplifying conference calls, has closed $5.1 million in Series A funding. The investors included 500 StartupsEd Norton (yes, the actor), Crystal Tech FundCNF Investments and Middleland Capital.

    Vires Aeronautics, a year-old, San Francisco-based company that develops airplane wing designs, has raised $1 million in a Series AA round of financing led by Draper Associates, with participation from Lemnos LabsVegasTechFundPromus Ventures, and numerous individual investors.

    Wickr, a 1.5-year-old, San Francisco-based startup that promises to allow users to send encrypted and self-destructing messages, has raised raised a $9 million Series A round led by Alsop Louie PartnersGilman Louie, the firm’s cofounder, has also made a personal investment in the company, alongside Thor Halvorssen, president of the Human Rights Foundation; the networking company Juniper; former counterterrorism czar Richard ClarkeEileen Burbidge of Passion Capital in London and other investors, says TechCrunch.

    Zumper, a 1.5-year-old, San Francisco-based online home and apartment rental search service, has raised $6.5 million led by Kleiner Perkins Caufield & Byers, with earlier investors New Enterprise Associates andDawn Capital also participating in the round. The company has raised $8.2 million to date.

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    New Funds

    Harmony Ventures, a four-year-old venture firm with offices in Menlo Park, Ca., and New York, is raising its second fund, according to an SEC filing that shows a $75 million target. Harmony looks to back capital-efficient companies that are raising a small expansion round. It was cofounded byMark Lotke, formerly a general partner at FTVentures and Pequot Ventures; and Gregory Eaton, who was once a managing director with Cheyenne Partners (which raised money from LPs on a deal-by-deal basis) and a founding general partner at Rembrandt Venture Partners.

    Harmony raised between $20 million and $30 million for its first fund, closed in 2012, according to a separate filing. The firm’s site suggests it has backed 11 companies startups with that capital, including Aveksa, a security software and identity management firm that was acquired last year by data storage giant EMC for undisclosed terms. Its newest investment appears to be PlaceIQ, a startup that uses location data for mobile advertising and that raised $15 million in Series C funding last month led by Harmony.

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    IPOs

    Five9, a 13-year-old, San Ramon, Ca.-based maker of call center software, has registered with the SEC to raise up to $115 million in an IPO. The company has raised roughly $72 million from investors over the years, according to Crunchbase. Its biggest shareholders are Hummer Winblad Venture Partners, which owns 23.2 percent of the company; Adams Street Partners, which owns 19.8 percent; Partech International, which owns 17.4 percent; Mosaic Venture Partners, which owns 17.4 percent; and SAP Ventures, which owns 6.7 percent.

    Opower, a 6.5-year-lld, Arlington, Va.-based company that provides software to utilities to help customers reduce their power bills, has registered with the SEC to raise $100 million in an IPO. The company has raised roughly $66 million over the years, according to Crunchbase. Its biggest shareholders are New Enterprise Associates, which owns 21.8 percent of the company; MHS Capital, which owns 8.3 percent; Accel Partners, which owns 5.4 percent; and Kleiner Perkins Caufield & Byers, which owns 5.4 percent.

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    Exits

    Basis Science, a three-year-old, San Francisco-based company that makes a health tracking wristwatch, has been acquired for between $100 million and $150 million, sources tell TechCrunch. Basis had raised roughly $32 million in funding, including from Intel Capital, the Dolby Family TrustStanford UniversityMayfield FundDCMNorwest Venture PartnersiNovia Capital, and Peninsula Ventures.

    Telerus, a 7.5-year-old, Denver-based developer of interactive voice response systems created for corrections industry, has been acquired by fellow jail communications service provider Securus Technologies, which is backed by the media-focused private equity firm Abry Partners. Telerus doesn’t appear to have disclosed any outside funding. Financial terms of the acquisition weren’t disclosed. The two companies produce inmate audio, video, GPS parolee tracking, big data analysis, and automated information services, according to Tech Rockies.

    WebDAM, an 8.5-year-old, San Mateo, Ca.-based maker of digital asset management software, has been acquired by the publicly traded, stock photography service Shutterstockreports TechCrunch. WebDAM was bootstrapped by its founders. Terms of the deal haven’t been disclosed.

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    People

    Forbes has published one of its famous lists of superrich people: This time, it’s the “richest tech billionaires” 2014 edition, the very richest of whom remains Microsoft cofounder Bill Gates. Here are the rest of members of this very elite club.

    Former NAACP President Benjamin Jealous is joining Kapor Capital, the venture capital firm of Mitch Kapor. The Associated Press has more on Jealous’s shift from East Coast political activist to West Coast VC, a switch he hopes will help in growing opportunities for blacks and Latinos in the tech economy.

    Rupert Murdoch is on to the next. Could that be Juliet de Baubigny? The Daily Mail is certainly excited about the prospect, noting that on Sunday, in the in the wake of his split with wife Wendi Deng, the “82-year-old News Corporation Chairman posed outside the Vanity Fair Oscar party in a sharp suit alongside” the Kleiner Perkins Caufield & Byers partner, who “gave the Hollywood stars a run for their money in a strapless turquoise gown, accessorised with a gold necklace and matching earrings.” The press has been fascinated with de Baubigny for some time, seemingly. In excerpts of British Vogue published last November by Valleywag, the British-born, “stylish venture capitalist who lives in a $3 million home in nearby Atherton with her husband, Andre, and their two children” was characterized as “an immaculate blonde who bears a resemblance to her friend Gwyneth Paltrow,” “boasts a wardrobe of Azzedine Alaia, Chanel, Derek Lam, and Alexander McQueen,” and “manages her frenetic family life, including holiday packing, through judicious spreadsheeting.” (The account likely surprised de Baubigny; as Valleywag noted yesterday, she divorced her husband, a cofounder of the venture firm Deep Fork Capital, in 2012.)

    Apple‘s CFO Peter Oppenheimer will retire at the end of September, after 18 years at the company, reports The Verge. He’ll be replaced by Luca Maestri, Apple’s vice president of finance and corporate controller, who joined Apple roughly a year ago from Xerox, where he was CFO.

    In other fun Daily Mail mail news (and StrictlyVC loves it, genuinely), the outlet reported yesterday that Facebook COO Sheryl Sandberg, “one of the business world’s biggest champions of correcting gender inequality in the workplace, is eying a rebellion against Democratic Californian Senator Barbara Boxer” by planning to run for her seat in 2016. It added in the very next bullet point: “But [a] source close to Sandberg told MailOnline this morning the claims were ‘100% untrue.’” So much intrigue, so little to go on. Stay tuned!

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    Happenings

    Morgan Stanley’s Technology, Media & Telecom Conference rolls into its second day at San Francisco’s Palace Hotel. If you aren’t going, you can register for its Webcast here.

    The 11th Annual Media Summit conference is also underway today and tomorrow. Details about the New York show are here.

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    Job Listings

    VMWare is looking to add an associate to its strategy and corporate development team in Palo Alto, Ca.

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    Essential Reads

    Wired has published what it’s calling “The Inside Story of Mt. Gox, Bitcoin’s $460 million Disaster.” (Unsurprisingly, it’s great.)

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    Detours

    Whatever this cool customer is being paid, he deserves a raise.

    People are more likely to trust strangers with names that are easier to pronounce, according to a new study from the University of California-Irvine.

    Hugo Boss’s “Bottled Night” men’s cologne is a “seductive and supremely masculine scent,” according to the company. It has also driven at least one cat to attack his owner.

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    Retail Therapy

    This is a movable building. It can be delivered to you anywhere. How cool is that?

    Really? Who would do this to themselves?

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