• At Pear Demo Day in Palo Alto, 13 Companies to Watch

    IMG_1265As  dozens of Teslas baked in the sprawling Palo Alto parking lot of a local law firm yesterday, 100 top investors packed into a high-ceilinged meeting room. There, they listened as 13 startups deliver four-minute presentations about why they’re worth watching.

    The companies — all of them roughly six months old or younger, and all led by current college students or recent graduates — were part of the Launchpad program of three-year-old Pear, an early-stage venture firm that annually invites computer science students from top schools to build companies in their office with a $50,000 uncapped note and no strings attached. (Until recently, the firm was known as Pejman Mar Ventures.)

    So far, Pear seems to be choosing these student teams wisely. Out of the eight groups that presented a year ago, one startup sold to Google and four others have raised seed funding. Pear’s inaugural class, in 2014, also saw one startup, FancyThat, sell to Palantir.

    Certainly, the venture capitalists gathered yesterday seemed enthusiastic. Ross Fubini, a partner at Canaan Partners, tweeted partway through the presentations that it was “looking like the best demo event of the year.” Another investor, Lux Capital partner Shahin Farshchi, told us afterward that he also thought it was “fantastic, with something for everybody, including consumer companies, analytics and AI companies, and deep tech for investors like me.”

    For those who weren’t there and may be curious, here’s what you missed:

    Allocate.ai: This company makes AI-powered time sheets to enable companies to better understand how and where their teams are spending time. According to the founders (who come from Stanford and UC Santa Barbara), 45 million people fill out time sheets in the U.S., and they estimate that this adds up to $11 billion in lost time. (Think of lawyers whose time is valuable and may spend upwards of 15 minutes a day tracking their billable hours.) They argue that made more efficient, the market could be a whole lot bigger, too. If you agree and want to reach out to them, you can do that at founders@allocate.ai.

    BlackSMS: Its tech allows users to send encrypted, password-protected, self-destructing iMessages that can even be disguised and masked inside of fake replacement texts. This struck us as useful for a variety of cases, and we hope we’re right about that. Its 20-year-old founder, Tyler Weitzman — who says he has built 30 apps since his middle school days — is now dropping out of Stanford to “go all in on BlackSMS.”

    To learn more, you can check out a longer piece that TC wrote here earlier this year. To contact Weitzman, you can email him at founders@black-sms.com.

    Capella Space: This data company says it can provide persistent and reliable information from space through a constellation of shoebox-size satellites that it’s building. How do they differ from the satellites of other startups? Its tech relies on synthetic aperture radar, meaning it sends radio waves down to the earth’s surface that — based on the reflection of the radio waves that go through the clouds and don’t require illumination from the sun — can capture images at night and despite heavy cloud cover. (Many other new constellations rely on optical technologies instead.)

    Capella does have competitors, including Ursa Space Systems. Ursa currently sells information to customers based on traditional (read big, bulky) satellites that employ synthetic aperture radar, and it’s planning to develop its own constellation of satellites. But it’s pretty much an open race at this point. You can reach the founders at founders@cappellaspace.com.

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    DeepLIFT Technologies: This company has developed a set of algorithms that it says can understand and explain any deep learning process by looking at inputs, identifying recurring patterns and other stuff.

    Why bother drilling into why machine learning processes work like they do? For one thing, regulators are starting to push back against “black box” technologies. Most notably, the EU recently introduced a provision to pass legislation that guarantees EU citizens a “right to explanation” when machine learning models are used to make decisions that impact them.

    The founders say the company is not raising money. (We’re not sure we believe this.) They also say their tech, currently in use across eight genomic labs in the U.S., has already attracted substantial interest from Alphabet, including from Google’s mobile development team and Alphabet’s life sciences subsidiary Verily. You can reach them at founders@deeplift.ai.

    More here.

    Connie

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  • The Kingmaker in the Background: Kathryn Gould

    GouldMost venture capitalists don’t curse like sailors. Most can’t boast a 90 percent internal rate of return over the course of their investing careers, either. Kathryn Gould — the inimitable founder of Foundation Capital, who today spends much of her time today on her vineyard in the foothills of California’s Sierra mountain range — is known for both.

    In select circles, Gould, who got her start in VC in the late ’80s at the now-defunct firm Merrill, Pickard, Anderson & Eyre, is also known for mentoring up-and-coming investors.

    We talked recently about her views on the industry – and which VCs she’s betting on right now.

    You used to make angel investments, including a $50,000 investment in Demandforce that returned $2 million when the company was acquired by Intuit in 2012. Why stop?

    I made three angel investments, and I wouldn’t say I won’t do more, but I’m a perfectionist and for me, making angel investments [requires as much time and effort] as running a firm. My lifetime IRR is 90 percent and I’m not going to mess with my numbers just to screw around.

    [Early-stage investor] Mike Maples and I put our personal money into Demandforce before we started Floodgate, but chance favors a prepared mind, and while I could still [make angel bets], I don’t want to.

    When you say that “we” started Floodgate, what do you mean?

    Mike [who logged time at Silicon Graphics and Trilogy Software, then cofounded a company, Motive, that went public in 2004] briefly floated through Foundation Capital [in the early 2000s] so I knew him, and we used to strategize about what was happening in venture business.

    He’d started to dabble with his own money, including investing in Twitter, which wasn’t an obvious winner. I’d retired [from Foundation in 2006], but I said, “If I were to do [another fund], I’d raise a small amount of money” [because of the changing economics of startups]. And we said, “Sh_t, let’s put together a business plan and do this thing.” So we mapped out how we’d do it, I helped him with his slides, and I introduced him to my three best investors at Weathergage, Horsley Bridge Partners, and the University of Chicago, and there he was.

    Are you an LP in Floodgate?

    Yes, though I help these guys, then invest in their firms, but I don’t get any special treatment.

    Who else have you helped get started?

    We [at Foundation] were investors in [entrepreneur-investor] Mar Hershenson’s companies. We invested in her [analog circuit company Barcelona Design], and when she developed this consumer penchant and hooked up with [angel investor] Pejman Nozad to launch their venture fund, I said, “Let me help you; I know classy institutional investors that will invest.” Even though I loved what they were doing, their written business plan was a goddamned mess. It was very random. And your slides have to be credible to go raise money from decent investors. I still see [Nozad and Hershenson] all the time to talk about things that are happening and give them ideas, and I’m an investor [in their fund].

    Most recently, I worked with Ashmeet Sidana, who was a GP at Foundation Capital for [nine years] and [left in September 2013] and started doing his own angel investing. We’d get together at a coffee shop in Portola Valley and I’d ask him what he was doing, and I was like, “This stuff is f_cking great, you should be doing this in a bigger way.” So we wrote his business plan, created his slides, I introduced him to several of his investors – he also has several Indian investors – and he just closed his first solo fund with $33 million. I think his firm, Engineering Capital, will be very successful.

    People will read this and start reaching out to you for introductions.

    I don’t want people calling me. I’m not going to help you raise your super sucky fund. I’ve known Mar for 20 years, Maples for 15. I’ve known Ashmeet for 15 years.

    I feel like I’m in the best of the best [of these small funds]. I think all the good ones are getting started or have started.

    —–

    You also coach some of Foundation Capital’s younger investors.

    There’s been solid turnover of people there and [there are] are bunch of guys who weren’t there [when I was] and who missed all my good stuff, so I’m giving some advice where I can.

    What do you tell them?

    That it’s not the calls you take. It’s the calls you make. Everyone is calling you with dumb startup ideas, and you can stay hugely busy sorting through that crap. My advice instead is to figure out who are the 10 to 20 smartest people you know and call them. One of them is always starting a company.

    You also hear VCs talk about how one company in their portfolio will be a huge winner, two or three will be also-rans, and the rest will be write-offs. Well, that’s bullsh_t. I didn’t go into a deal unless I thought it was going to be a winner. All 10 had to win, that was my attitude. A lot of VCs run and hide, but I worked hard, I was a good fixer, and I earned my money.

    I’m loath to ask, but you’re a very successful female VC. What do you make of the attention paid to the industry’s gender imbalance?

    I think all the press about it has done women a disservice. People want to bring in a woman partner now, and I’m like, “You want to bring in a good partner.” If someone isn’t listening to you [as a woman], it’s because your argument in weak. If you think instead that they aren’t listening because you’re a woman, if you allow yourself that false luxury [of thinking you’re being discriminated against], you won’t grow.

    You’ve never encountered a problem that you attribute to being a woman?

    I have. Once. I was at Merrill, Pickard, Anderson & Eyre. Bruce [Dunlevie] and Andy [Rachleff] and I all started the same year, and when those guys went off [to cofound the venture firm Benchmark with several others in 1995], I had to decide what I was going to do. I was on a roll. The 90 percent IRR thing was well on its way, I had IPOs and acquisitions and good things happening, so I talked with firms. I was picky, but there were six or seven firms I would have joined. They were all d_cking around, though, and I could see it would take a year for me to get a job with these guys. Meanwhile, I know if I’d been a guy with my numbers, I would have been snapped up in a week.

    I didn’t wait the year to see what would happen. Instead, after a couple of months, I thought, I’ll start a fund, and I had the money raised in three months. As it turns out, half or maybe more of the CIOs at [a lot of these institutional investors] are women. I’m really glad, too. I loved doing it my way.

    To this day, very few women have broken into the all-male firms. But I think the problem will go away, not through those firms hiring women, but because other firms like [the woman-led firm] Cowboy Ventures will grow up around them. I do think that for the most part, the industry is a meritocracy.

    Photo courtesy of Forbes.

    Connie

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  • On the Bias Toward Writing About Bias

    WomenTechInvestorThe last two years have seen countless articles about why there aren’t more successful women in tech. First, a story is published about the dearth of female entrepreneurs or female investors (or both), then people either applaud the piece or enumerate why its wrong-headed (or both). Finally, someone else is legitimately wronged by some knucklehead, and the cycle begins anew.

    Much of the coverage has had a positive impact. By shining a light on age-old behaviors that were deemed acceptable for too long, more tech startups are instituting sensitivity training and diversity initiatives. Women who felt isolated in facing gender bias have learned that they’re far from alone.

    The many reports about women in tech have also put a finer point on some differences between male and female entrepreneurs that are now being actively addressed.

    For example, Mar Hershenson, a serial entrepreneur-turned venture capitalist, now advises some of the female entrepreneurs with whom she meets to “raise their voice – not be afraid to talk about the best-case scenario for their startups.” Talking up their work doesn’t always come as naturally to women, says Hershenson. But “venture firms look for big vision, nothing-is-going-to-stop-me type pitches,” and getting that memo beforehand is useful, she adds.

    Still, some think much of the coverage around women in tech is becoming counterproductive.

    Mada Seghete, cofounder of the deep-linking tech company Branch Metrics, says some of what she reads in the media rings true. For example, she observed more of a “risk-taking attitude, to some extent” by her male classmates at Stanford, where Seghete — who has two engineering degrees from Cornell — recently snagged her MBA.

    Yet Seghete also notes that a higher percentage of her female classmates have seen their businesses take off since graduating, partly because “a lot of guys played with the ideas and took their time” while their female peers dove into things that are “less risky,” says Seghete.

    Among those companies is The League, a dating startup cofounded by Seghete’s former classmate Amanda Bradford. It just closed on $2.1 million in funding last week.

    Seghete also seems to think the ongoing narrative of women as victims can have unintended consequences – namely, making women unnecessarily ill at ease.

    “Even as a software developer, I don’t consider that I’m different. And maybe it’s because I don’t anticipate bias that I’m confident in a way that people don’t look at me differently,” says Seghete. (Her own company — cofounded with classmates Alex Austin, Dmitri Gaskin, and Mike Molinet — has raised $3 million led by New Enterprise Associates.)

    “If I thought I’d be facing bias in a situation, then I might be more self-conscious,” she says. “It would be a self-fulfilling process.”

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

    Connie

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  • In Palo Alto, a Micro Community in the Making

    demo dayOn Tuesday, in leafy Palo Alto, Ca., tucked away in a nondescript office enlivened by bright, computer-themed art, the 1.5-year-old early-stage firm Pejman Mar Ventures welcomed journalists and investors to watch half a dozen startups explain what it is that they’re doing. Four of the teams were comprised of Stanford students who had tinkered on their nascent ideas at Pejman Mar’s offices this past summer. The other two startups that presented are fully up and running and about to hit the fundraising trail.

    In terms of quantity, it wasn’t much of a showcase. Two of the four Stanford-led teams are returning to school, its founders determined to finish their computer science PhDs. Pejman Mar’s timing could have been better, too, given everything else that was going on in the Bay Area on Tuesday, including Apple’s highly anticipated launch event and TechCrunch’s signature fall conference in San Francisco.

    Still, plenty of VCs and reporters showed up — including from SoftTech VC, Floodgate, CRV, and Forbes — and for two reasons, seemingly.

    First, Pejman Nozad and Mar Hershenson, the firm’s likable cofounders, are highly focused on creating a community around their young firm. Making room for ambitious Stanford students to hole up during the summer months is one way of going about it.

    The pair also hold weekly events at their space that feature VCs and renowned founders. Past guests include John Doerr of Kleiner Perkins, Yahoo cofounder Jerry Yang, and Zynga founder Mark Pincus — though an even more popular attraction, says Nozad, is a life coach who comes twice a month to help founders with their personal problems. (“When you say you’re going to have a VC here, maybe 10 or 20 people come,” he says. “As soon as we announced the life coach, we had a wait list.”)

    Of course, squishier stuff aside, investors are paying close attention to Pejman Mar because of its track record to date.

    On his own, Nozad, who famously sold rugs to tech millionaires before becoming a full-time investor, has backed more than 100 companies over the last 14 years, many of which have gone on to big exits, including the early smartphone company Danger, which sold to Microsoft in 2008 for $500 million. (It’s also through Danger that Nozad met Hershenson, a three-time entrepreneur whose husband cofounded Danger.)

    photo 2Since launching their fund a year and a half ago, the pair have backed another 21 companies, half of which have raised follow-on rounds – including some doozies. DoorDash, for example, a 1.5-year-old, Palo Alto-based restaurant food delivery startup, closed on a $17.3 million Series A round in May led by Sequoia. The company has raised $19.7 million altogether. Guardant Health, a Redwood City, Ca.-based startup that has developed a blood test for cancer, has also gone on to raise significant funding, most recently raising a $30 million Series B round in April led by Khosla Ventures. Guardant has raised at least $40 million altogether.

    Little wonder that on Tuesday, VCs were paying close attention to the two startups that will soon be seeking funding: Solvvy, which is trying to reinvent mobile search and has so far raised $500,000 from Pejman Mar (it’s seeking out more seed funding this fall), and Fieldbook, whose software lets users track and organize their information in simple data tables. Fieldbook has also raised $500,000, including from Pejman Mar; AngelList cofounder Naval Ravikant; former Microsoft executive Steven Sinofsky; and Lotus founder Mitch Kapor. The company says it will seek out more funding in the middle of next year.

    It’s a little early to know whether the assembled investors connected with the startups this past week. With Pejman Mar’s growing reputation, though, it’s easy to imagine they’ll find interest somewhere along the line. “These companies are for real,” Nozad told me on Tuesday, looking like a proud parent as the crowd chatted with the presenting companies. “They’re great people.”

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

    Connie

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  • StrictlyVC: June 17, 2014

    Good Tuesday morning, everyone! We’re so sorry to those of you who tried and couldn’t click through yesterday’s assortment of links. Our ESP was doing some closed-curtain emergency maintenance until around noon PST. (We’re just relieved that we didn’t find a digital dust pile when we were allowed back into the system.)

    —–

    Top News in the A.M.

    AT&T will be the exclusive carrier for Amazon‘s new smartphone, which is expected to be unveiled tomorrow, according to WSJ sources.

    —–

    True Seed Investors

    In recent years, the bar has been steadily rising for funding rounds of all sizes, including seed rounds. Indeed, last week, early-stage investor Jeff Clavier told us that “there are way more seed [stage] VCs investing at the same time – when there are proof points – than those who just go with their gut instincts.”

    Clavier readily admits that he’s among those looking for early products, not ideas, as was once the case. His firm, SoftTech VC, pores over the business ideas of between 500 and 750 companies each quarter and invests in just four or five of them. Given so many proposals, startups with traction inevitably stand out. “We need a way to filter them somehow,” he explained.

    Still, as round sizes and valuations shoot upwards, and VCs like Clavier focus on the numbers that can justify their increasingly large bets, a contrarian opportunity has arisen for investors who are willing to just go with their gut. One daredevil that falls in this category is venture capitalist Manu Kumar, a man renowned in Silicon Valley for helping massage messy concepts into fundable businesses. Others include Pejman Nozad and Mar Hershenson, founders of the eponymous early-stage firm Pejman Mar. As Hershenson, who I met with last week, told me, “We invest super early, when there are two or three people and no product. It’s what true seed meant a long time ago.”

    Hershenson and Nozad – a former rug dealer turned highly successful angel investor – are rushing into this void with open arms. With a debut fund of $40 million, the 10-month-old firm has already backed a dozen teams, half of which have gone on to raise additional funding from heavy-hitting venture firms, including from Sequoia Capital, Kleiner Perkins Caufield & Byers, Canaan Partners, and Khosla Ventures. (Guardant Health and DoorDash are among those to raise a follow-on round. Soon to be in the market – EagerPanda, a semantic search startup.)

    Nozad’s reputation for risk-taking has become a huge source of dealflow, a fact which Hershenson knows from first-hand experience. Fifteen years ago, her husband, Matt, co-founded Danger, an early smartphone company. When he was trying to get the company off the ground, he knocked on investors’ doors for nine solid months. “One day,” she recalls, “Matt came home and said, ‘Well, Pejman Nozad is giving us money.’ I said, ‘Who is Pejman?’ Matt said, ‘He sells rugs.’ It was like, ‘What?!’” Microsoft subsequently acquired Danger in 2008 for $500 million

    Hershenson – herself a three-time entrepreneur who remained friends with Nozad over the years – also drums up deal flow by spending her days at Stanford, where she received her PhD in electrical engineering.

    “I’m there all the time – when there are final project classes, if they need anyone to judge [a competition] or [give a] talk. We’re close with the students and with the organizations at the school.” There are “a lot of amazing people at Stanford,” she adds. “There’s plenty for everybody – let’s put it that way.”

    In fact, the firm is hosting six “companies” from Stanford this summer at its 5,000-square-foot office in downtown Palo Alto, Ca.

    “We don’t run it like an incubator: some of them are graduating but some will go back to school,” she explains. Still, Pejman Mar is giving each between $15,000 and $25,000 in convertible, uncapped notes.

    “We won’t count them as portfolio companies,” she tells me. They’re too nascent. Later on, though, who knows? “Maybe some of them will work out,” she says with a smile.

    —–

    New Fundings

    BitGo, a year-old, Bay Area-based bitcoin security platform aimed at making virtual currency easier and safer to use, has raised $12 million in funding, including from Redpoint Ventures; Bitcoin Opportunity Corporation, a Bitcoin investment vehicle run by the entrepreneur Barry Silbert; and Ashton Kutcher’s A-Grade Investments. Dealbook has morehere.

    BuzzFeed, the 5.5-year-old, New York-based media company may raise a $200 million funding round — its fifth to date — reports VentureBeat. The company has raised $46.3 million to date, including from New Enterprise Associates, Lerer Ventures, RRE Ventures, Hearst Ventures, and SV Angel. Asked for comment, a BuzzFeed spokesperson told VentureBeat, “We don’t comment on rumors and speculation.”

    Clari, a two-year-old, San Francisco-based mobile sales productivity platform, has raised $20 million in Series B funding led by Bain Capital Ventures. Northgate Capital also participated in the round, along with earlier investor Sequoia Capital. The company has raised $26 million altogether, shows Crunchbase.

    Cloud Elements, a two-year-old, Denver-based cloud API integration service, has raised $3.1 million in Series A funding led by Grotech Ventures and Icon Venture Partners, with participation from Galvanize Ventures.

    Crobo, a three-year-old, Berlin-based online gamer acquisition network, has raised $5.7 million from unnamed investors to double its team and continue to expand in Asia and the U.S.

    LeukoDx, a five-year-old, Towson, Md.-based medical diagnostics company that makes a test to diagnose sepsis and other conditions, has raised $7 million in new funding from the private equity group Axcel Partners and individual investors. The company has raised $9.3 million to date, shows Crunchbase.

    PowerVision, a 12-year-old, Belmont, Ca.-based medical device company that’s developing implantable intraocular lenses, has raised $30 million in Series D funding. New investors Aisling Capital and Correlation Venture Partners joined earlier investor Venrock to add $10 million to the $20 million that the company closed on earlier this year. Others of the company’s investors include Advanced Technology Ventures, Frazier Healthcare, Johnson & Johnson Development Corp., and Medtronic. The company has raised at least $86.5 million to date, shows Crunchbase.

    Tapatalk, a five-year-old, L.A.-based social app that aggregates discussions from forums all over the Internet, has raised $5.8 million in funding from Floodgate and Accel Partners. The company, founded in Shanghai, had relocated to California to participate in the 2.5-year-old, Santa Monica, Ca.-based accelerator, MuckerLab.

    True North Therapeutics, a year-old, South San Francisco-based biotechnology company that’s developing therapies designed to treat autoantibody-driven rare diseases, has raised $22 million in Series A funding. Backers include Kleiner Perkins Caufield & Byers, MPM Capital, SR One, Biogen Idec New Ventures, and Baxter Ventures. Last year, True North was spun out of another privately held biotech company, iPierian, which was acquired in April by Bristol-Myers Squibb.

    UCloud, a two-year-old, Shanghai-based cloud computing infrastructure and services company that aims to be the Amazon Web Services of China, says TechCrunch, has raised $50 million in Series B funding led by Bertelsmann Asia Investments and Legend Capital. The company had previously raised $10 million in Series A funding from Bertelsmann, along with DCM.

    VeloCloud, a two-year-old, Los Altos, Ca.-based company whose software delivers wide-area networking services through the cloud, has raised $21 million in new funding led by New Enterprise Associates, with participation from Venrock and The Fabric, a networking incubator.

    Victorious, a 13-month-old, L.A.-based startup that is reportedly looking to help YouTube stars create their own revenue-generating sites and apps, is raising a $13 million round led by Kleiner Perkins Caufield & Byers, with Lowercase Capital and former YouTube executive Dean Gilbert also participating. Recode has the story here.

    Virtru, a 2.5-year-old, Washington, D.C.-based company whose encryption software enables email users to revoke emails, prevent forwards, and set expiration dates (among other things), has raised $6 million in new funding led by Bessemer Venture Partners. The company, which raised $4.3 million in debt financing earlier this year, has raised $10.3 million altogether.

    Walker & Co., a year-old, Palo Alto, Ca.-based company that makes razors and shave creams with African-Americans in mind, has raised $6.9 million in Series A financing from earlier investors to expand its product line. Andreessen Horowitz led the round. Upfront Ventures, Collaborative Fund, Daher Capital, and Johnson + Partners also participated.

    Weaved, a seven-month-old, Palo Alto, Ca.-based company whose technology is focused on securely networking devices across the Internet, has raised $250,000 in seed funding from TMT Investments, a four-year-old firm that’s based in St. Helier in the English Channel and which expressly backs seed-stage startups that focus on the so-called Internet of Things.

    XiaoZhu, a two-year-old, Beijing-based company that aspires to become China’s Airbnb, has raised $15 million in Series B funding led by Legend Capital, with earlier investor Morningside Venture Capital, participating. According to China Money Network, the company currently has operations in 13 Chinese cities and provides connects users with lodging in more than 130 cities in the country.

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    New Funds

    Bull City Venture Partners, a two-year-old, Durham, N.C.-based early-stage firm that invests in companies in and around North Carolina, has closed a $26 million third fund from LPs that include Blue Cross and Blue Shield of North Carolina, Capitol Broadcasting Company, Cisco, venture capitalist Brad Feld, Grosvenor Capital Management, Industry Ventures and Red Hat.

    The family behind Dolby Laboratories is launching a new, early-stage venture fund to formalize its “ongoing, multi-generational commitment to supporting talented entrepreneurs.” Longtime VC Pascal Levensohn, who wound down his own venture firm in 2010, has joined the outfit to invest in new startups and determine which companies in its portfolio merit follow-on funding. TechCrunch has more here.

    McDonald’s has launched a digital incubator in Silicon Valley, prompting at least one nerd to ask: Can I have fries with that augmented reality app? (Yes, fine, StrictlyVC is that nerd.) The fast-good giant isn’t sharing much yet, but TechCrunch has more here.

    Nauta Capital, a 10-year-old, Barcelona-based early-stage venture fund focused on Spanish startups, is raising a fourth fund and targeting $150 million for the effort, reports VentureWire. The firm, which closed its third fund with $150 milllion in 2011, counts ForceManager, a Barcelona-based company that makes a sales force management system, among its most recent investments.

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    IPOs

    Trupanion, a 14-year-old, Seattle-based company that provides medical insurance for dogs and cats, has filed for an IPO. The company had raised at least $9 million from investors, shows Crunchbase. Its biggest shareholders include Maveron, which owns a 33.7 stake in the business; Highland Capital Partners, which owns 15.8 percent; and RenaissanceRe Ventures, which owns 12.7 percent.

    U.S. IPOs expected to price this week.

    —–

    Exits

    Fusion-io, the eight-year-old, Salt Lake City, Ut.-based flash storage gear company, is being acquired by its older rival SanDisk, for about $1.3 billion. Both companies are publicly traded. Reuters has more here.

    Parastructure, a two-year-old, San Francisco-based startup that builds data-analysis software on top of open source infrastructure, has been acquired by Dropbox. Terms of the deal aren’t being disclosed, though a “reliable” TechCrunch source says the company was purchased for an amount in the “lower eight figures.” The company hadn’t publicly disclosed any outside funding.

    Streem, a two-year-old, San Francisco-based, cloud-based subscription service that offers users unlimited storage for music, movies, and other online content, is being acquired for an undisclosed amount of cash and stock by Box, the cloud-based file-management service. Streem has raised $875,000 in seed funding from Y Combinator, 500 Startups, Start Fund, IronFire Capital, Arbor Ventures, and numerous angel investors.

    —–

    People

    “Dilbert” creator Scott Adams, who spent many years lampooning cubicle culture has a.) cofounded an Internet startup and b.) wrote a post yesterday about so-called pivots — without mocking them even a little bit.

    Dan Slagen, senior VP of marketing at Nanigans, a Boston-based Facebook ad software firm, has left to become the chief marketing officer of HourlyNerd, a Boston-based online marketplace matching MBAs with businesses needed part-time or hourly work. Beta Boston has the news here.

    The tech world is “gearing up for its own destination wedding of the century,” reports PageSix, which has some details on the upcoming wedding in Italy of Nikesh Arora, Google‘s chief business officer, and real estate executive Ayesha Thapar. Guests are reportedly expected to include Google cofounders Larry Page and Sergey Brin, along with Facebook CEO Mark Zuckerberg.

    —–

    Job Listings

    Instacart, the San Francisco-based same-day-delivery service that yesterday announced $44 million in new funding, is looking for a business development lead.

    —-

    Essential Reads

    Is Klarna the new PayPal?

    Wired gets a rare peek into Amazon‘s fulfillment operations.

    Why customized ads are so creepy to us: “I am never quite sure if Facebook’s advertising algorithms know nothing about me, or more than I can admit to myself.”

    —–

    Detours

     A bazillionaire’s guide to stress relief.

    Why so many people put off going to bed, even when they know they’ll regret it the next morning.

    —–

    Retail Therapy

    Exactly. Why buy all that extraneous material for your torso when all you really want is the hoodie?

    —–

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    Connie

  • True Seed Investors

    Pejman MarIn recent years, the bar has been steadily rising for funding rounds of all sizes, including seed rounds. Indeed, last week, early-stage investor Jeff Clavier told us that “there are way more seed [stage] VCs investing at the same time – when there are proof points – than those who just go with their gut instincts.”

    Clavier readily admits that he’s among those looking for early products, not ideas, as was once the case. His firm, SoftTech VC, pores over the business ideas of between 500 and 750 companies each quarter and invests in just four or five of them. Given so many proposals, startups with traction inevitably stand out. “We need a way to filter them somehow,” he explained.

    Still, as round sizes and valuations shoot upwards, and VCs like Clavier focus on the numbers that can justify their increasingly large bets, a contrarian opportunity has arisen for investors who are willing to just go with their gut. One daredevil that falls in this category is venture capitalist Manu Kumar, a man renowned in Silicon Valley for helping massage messy concepts into fundable businesses. Others include Pejman Nozad and Mar Hershenson, founders of the eponymous early-stage firm Pejman Mar. As Hershenson, who I met with last week, told me, “We invest super early, when there are two or three people and no product. It’s what true seed meant a long time ago.”

    Hershenson and Nozad – a former rug dealer turned highly successful angel investor – are rushing into this void with open arms. With a debut fund of $40 million, the 10-month-old firm has already backed a dozen teams, half of which have gone on to raise additional funding from heavy-hitting venture firms, including from Sequoia Capital, Kleiner Perkins Caufield & Byers, Canaan Partners, and Khosla Ventures. (Guardant Health and DoorDash are among those to raise a follow-on round. Soon to be in the market – EagerPanda, a semantic search startup.)

    Nozad’s reputation for risk-taking has become a huge source of dealflow, a fact which Hershenson knows from first-hand experience. Fifteen years ago, her husband, Matt, co-founded Danger, an early smartphone company. When he was trying to get the company off the ground, he knocked on investors’ doors for nine solid months. “One day,” she recalls, “Matt came home and said, ‘Well, Pejman Nozad is giving us money.’ I said, ‘Who is Pejman?’ Matt said, ‘He sells rugs.’ It was like, ‘What?!’” Microsoft subsequently acquired Danger in 2008 for $500 million

    Hershenson – herself a three-time entrepreneur who remained friends with Nozad over the years – also drums up deal flow by spending her days at Stanford, where she received her PhD in electrical engineering.

    “I’m there all the time – when there are final project classes, if they need anyone to judge [a competition] or [give a] talk. We’re close with the students and with the organizations at the school.” There are “a lot of amazing people at Stanford,” she adds. “There’s plenty for everybody – let’s put it that way.”

    In fact, the firm is hosting six “companies” from Stanford this summer at its 5,000-square-foot office in downtown Palo Alto, Ca.

    “We don’t run it like an incubator: some of them are graduating but some will go back to school,” she explains. Still, Pejman Mar is giving each between $15,000 and $25,000 in convertible, uncapped notes.

    “We won’t count them as portfolio companies,” she tells me. They’re too nascent. Later on, though, who knows? “Maybe some of them will work out,” she says with a smile.

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    Connie

    ,

  • Silicon Valley’s Most Famous Rug Dealer Forms a New Fund

    0320_pejman-nozad_390x2201Pejman Nozad, Silicon Valley’s best-known rug dealer, has launched a new, low-flying venture firm.

    According to SEC filings, Nozad began raising $20 million for the new firm, Pejman Mar, a couple of months ago; his cofounder in the venture is serial entrepreneur Mar Hershenson.

    The new effort isn’t exactly top secret. Nozad has himself mentioned it in social media forums, and Hershenson’s LinkedIn profile reflects that she’s been co-running Pejman Mar since May. Still, Nozad isn’t discussing the effort publicly just yet. (When I’ve asked to meet about it over the last couple of months, he has politely declined each time, suggesting that we sit down at an unspecified future date.)

    The firm will be the second that Nozad has cofounded. In 1999, Nozad partnered with Saeed and Rahimi Amidi, whose rug-dealing father had given Nozad one of his first jobs as a salesman soon after the Iranian native arrived in San Francisco with $700 in his pocket. Silicon Valley lore has it that Nozad so successfully formed relationships with the rug gallery’s well-heeled clients — including Sequoia Capital’s Doug Leone – that the Amidis and Nozad formed Amidzad Partners to seize on those ties and the investment opportunities that come with them.

    Some VCs would kill for the track record that Nozad has established since, with past investments that include the mobile computing device company Danger, acquired by Microsoft in 2008; the online contest site Bix, which Yahoo purchased in 2006; and the online movie service Vudu, bought by Walmart in 2010.

    None were huge home runs for investors, but Forbes estimates that Nozad is “worth in the ballpark of $50 million,” suggesting those many base hits have added up. More, Amidzad is an early investor in other, flashy companies that have yet to exit, including Dropbox, which Nozad himself reportedly introduced to Sequoia. (Dropbox closed its most recent round of $250 million a year ago, at a $4 billion valuation.)

    It isn’t clear whether Nozad will continue to invest with Amidzad, on whose Website he remains featured. Rahimi Amidi didn’t respond to related questions.

    Either way, he seems to have a hard-charging partner in Hershenson, a Stanford engineering PhD who has cofounded numerous companies, including, most recently, the mobile commerce company Revel Touch. The 2.5-year-old startup, since renamed Tocata, has raised more than $10 million from investors, including Nozad. (Hershenson left the company in November 2012.)

    The duo has already placed numerous bets in recent months, including on a still-stealth startup called Solvvy; on Sensor Tower, whose tools help developers track and increase their app rankings within app stores; and on DoorDash, a food-delivery company whose funding was led by Khosla Ventures and Charles River Ventures.

    The question now is whether investors will be as charmed with Nozad as the many industry friends he has made over the years. At least one VC who has co-invested alongside him thinks they will. Nozad’s credentials may not look like everyone else’s, the investor told me, but it’s all about track records. And “Pejman,” he said, “has a good reputation.”

    Photo courtesy of Forbes.

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