• A Former Rothenberg Employee is Suing Over Breach of Contract and More

    Screen Shot 2016-08-29 at 9.40.19 PMDavid Haase, a former employee of the beleaguered San Francisco-based firm Rothenberg Ventures Management Co. (RVM), is suing the firm and its founder, Mike Rothenberg, saying he was asked to run up more than $100,000 in business expenses on an American Express account at the direction of Rothenberg and never repaid.

    In his lawsuit, filed last week in San Francisco, Haase says he joined Rothenberg Ventures in April of this year and tasked with “providing various services of a Chief Financial Office for RVM” while also doing work on behalf of the company’s affiliated businesses, including its four-year-old venture arm,Rothenberg Ventures, and its small but growing virtual reality production house,River Studios, founded in May 2015.

    Haase says in his suit that in May, he opened the account with Rothenberg’s approval “for the purpose of acting as a credit line for the day-to-day expenses incurred by RVM.” These included business expenses charged by Rothenberg’s “numerous administrative assistants at his direct request.” Part of those expenses included payroll, according to our sources.

    As of the suit’s filing, Haase’s account was overdue in the amount of $109,352.20 and, according to his suit, Rothenberg has “wrongfully and capriciously refused to pay” that debt, leaving Haase to deal with the charge, as well as the accruing interest on the amount. The suit says that Rothenberg “disavowed any responsibility on the part of RVM” despite having previously paid expenses charged to the card to the tune of $140,000.

    Haase’s charges don’t end there. In a claim that may be of even greater interest to those following the case, Haase also says that Rothenberg co-mingled the accounts of Rothenberg Ventures and River Studios.

    Whether this could prove problematic for Rothenberg isn’t yet clear; even LPs seem confused about how much of River Studios they own and how distinctly it was managed from Rothenberg Ventures. But Haase’s suit goes so far as to allege Rothenberg of treating “such accounts as personal accounts, to such an extent that such business entities were in fact his alter ego.”

    More here.

    Connie

  • At HBS, a Case Study in What Not to Do

    Screen Shot 2016-09-03 at 6.23.02 PMAt Harvard Business School, students pay top dollar to learn everything from how to manage international trade to scaling technology ventures. They’re also schooled in the art of venture capital. Among the case studies they learned last year is the story of Rothenberg Ventures (RV), a four-year-old seed stage firm.

    Whether the San Francisco outfit should have been part of their curriculum is an open question.

    Though RV was founded by HBS graduate Mike Rothenberg, the firm, which has raised at least $47 million over the years and employed upwards of 60 people at its peak, is on the brink of imploding owing to a “lack of controls,” in the words of one of its investors.

    That the firm isn’t a breakaway success story isn’t necessarily the issue. Many case studies center of companies that make missteps. A larger problem, seemingly, is that the study about RV – which was funded by HBS before the firm’s troubles publicly surfaced last week — was also co-authored by two professors who have a “significant financial interest in Rothenberg Ventures,” as stated prominently in a curriculum footnote. (The study is available for purchase here.)

    One of those professors has since left HBS and is now a visiting associate professor at MIT’s Sloan School of Management. He didn’t respond to a message seeking more information.

    Asked about attracting students’ attention to a venture firm that he has funded, Professor Ramana Nanda, another of the study’s co-authors, wrote us yesterday that HBS has numerous, strict guidelines governing the relationship between professors and students, the most relevant in this case being that professors aren’t allowed to invest in ventures started by current students or to contract with them while students to invest after they graduate. Dr. Nanda notes that he made an investment in RV after Rothenberg graduated from HBS, as he sometimes has with other HBS alums.

    Stringent ethicists might quibble with whether that’s sufficient, given that many HBS students attend the school with an eye toward getting a startup off the ground and that introducing them to certain brands may make it more likely that students will approach them.

    It’s easy, too, to imagine a fund using the support of HBS professors (not to mention an HBS case study) to gain legitimacy with future investors.

    More here.

    Connie

    ,

  • At Rothenberg Ventures, the Rise and Fall of a Virtual Gatsby

    Screen Shot 2016-08-29 at 9.40.19 PMRothenberg Ventures, the four-year-old, San Francisco-based seed-stage venture firm, may be on the brink of implosion, say several sources close to the firm.

    We reported yesterday that several high-level employees had parted ways with Rothenberg, including its director of finance and the head of its SF office, who happen to be father and son (Tom and Tommy Leep). We’ve subsequently learned that firm departures run far more widely. Other top executives who’ve left include the company’s chief revenue officer, who quit yesterday; the company’s chief financial officer, who left in June; general manager James Taylor, who left very recently; and Fran Hauser, a former president of digital at Time Inc. Hauser was brought in with some fanfare as a venture partner in May 2014. Yesterday she updated her LinkedIn profile to reflect that she left Rothenberg in July.

    Messages to Rothenberg have not been returned. According to one source, Rothenberg Ventures founder Mike Rothenberg has told those remaining that “very few people will be left.” In what appears to be a related development, the firm’s site has been down since last night.

    Why the mass exodus? According to one source, Rothenberg Ventures is answering questions from the SEC after a lower-level employee alerted the agency to what this person reported as wire fraud and breach of fiduciary duty. This same source says the employee was subsequently fired and is now suing the firm for retaliation.

    All SEC investigations are conducted privately. An investigation does not mean that the agency will file a case in federal court or bring an administrative action.

    Either way, a much thornier issue for Rothenberg Ventures, say numerous former employees, is founder Rothenberg himself, who has sometimes seemed to live more like a billionaire than the manager of a modest venture fund — spending lavishly to attract moneyed individuals as investors and, over time, growing increasingly focused on becoming as famous as some of them.

    Making a millionaire

    It all began as a minor but inspirational story, proof that the American Dream can still come true.

    Rothenberg, an Austin native who says he comes from humble means — “no one in my family has any money,” he once told us — was smart enough to nab undergraduate and graduate degrees from Stanford, then bootstrap a real estate fund with his brother before moving on to Harvard to secure an MBA.

    Soon afterward, inspired by business leaders he had met while at Stanford, Rothenberg planted himself in San Francisco and got down to the business of trying to shake up the stodgy venture industry. Step one involved raising a $5 million fund from “friends, family, and former roommates,” as reported in a Bloomberg story about Rothenberg last year.

    His timing was ideal as these things go. In 2012, the market was in the middle of a three-year upswing, following the financial crisis of late 2008. Some newer faces were also beginning to gain prominence in the venture industry, along with the trust of so-called limited partners — the individuals and institutions that fund venture firms.

    Rothenberg is also a natural salesperson, and, as such, quickly evolved his pitch for Rothenberg from yet another seed-stage fund to a thought-leading outfit willing to make big bets on virtual reality before most people in Silicon Valley saw it as a major opportunity.

    More here.

    Connie

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  • Several Key Rothenberg Ventures’ Employees Have Left the Firm

    Screen Shot 2016-08-29 at 9.28.08 PMSeveral high-level employees at the early-stage venture firm Rothenberg Ventures have recently left, we’ve learned. Among them is Tommy Leep, a partner and the head of Rothenberg’s San Francisco office, who left last month after spending two-and-a-half years with the firm. (A former product manager at Intuit, Leep spent the previous two years as “chief connector” at the venture firm Floodgate.)

    Other recent departures include Tom Leep, father to Tommy, who’d spent more than three years as Rothenberg’s director of finance before leaving in June; Sophie Liao, who was recently hired with the title of Managing Director, Asia-Pacific Region and appears to have left this month; and Catherine Johnson, a former SVP of HR at BrightSource Energy who joined Rothenberg Ventures this spring, only to leave three months later, in June.

    Neither Liao or Johnson has returned a request for comment. Leep referred all questions about the firm to a company spokesperson. Asked if his father’s departure and his own were connected or unrelated, Leep said he had “no comment at this time.”

    A separate source suggests Leep left of his own accord, while a wide number of other employees were laid off. We don’t know if Michael Dempsey was among them, but the former CB Insights analyst, who joined Rothenberg Ventures in January as an investor, also left last week. Dempsey didn’t respond to a request for more information.

    Rothenberg Ventures was founded just four years ago by Mike Rothenberg, an Austin native who nabbed a master’s in management science and engineering from Stanford before getting his MBA from Harvard.

    Despite its age, the firm has made something of an outsize impact on the local venture industry, including by organizing popular events, such as an annual Founders Field Day at AT&T Park, where the San Francisco Giants play, and by barreling into virtual reality investments before many investors were paying much attention to them.

    Indeed, in late 2014, Rothenberg Ventures announced it would be launching a startup accelerator, River, which planned to provide $100,000 in seed funding to virtual reality companies expressly. Among those early bets was FOVE, which makes an eye-tracking head-mounted display. FOVE passed through Microsoft Ventures Accelerator in London before being selected for River’s inaugural class, but, notably, it went on to raise an $11 million Series A round in March.

    By May of last year, Rothenberg Ventures had also created River Studios, a “creative house for VR production” that, according to the firm’s site, currently “consists of 30 passionate creators, artists and developers, committed to creating inspiring stories, and pushing the boundaries of this awesome medium.”

    More here.

    Connie

    ,

  • Thirteen Virtual Reality Companies Head to San Francisco

    samsung-gear-vr-innovator-editionLate last year, three-year-old Rothenberg Ventures announced it would be launching a startup accelerator, River, that planned to provide $100,000 in seed funding to virtual reality companies expressly. To some, it might have seemed like a calculated, and possibly unwise, bit of counterprogramming. After all, by backing a variety of startups, most accelerator programs are able to hedge their bets and reduce the risk that a whole batch will fall out of fashion.

    Yet the San Francisco firm argues that the the 13 companies it has selected, from roughly 200 applicants, is as diverse as any early Y Combinator class. An eye-mounted head-tracking display that helps the physically challenged with daily tasks? Check. Virtual reality technology that changes the way people experience news events? Check. “Everyone keeps calling it a ‘sector,’” says the firm’s founder, Mike Rothenberg. “But just as the Internet is ubiquitous, virtual reality will be ubiquitous in 10 or 20 years. This technology is really going to change everyone’s life.” We talked about it yesterday.

    You’re about to welcome 13 companies into your new accelerator program, which will run from February through May. What was the criteria for acceptance?

    We were really looking for the most innovative applications across every industry. We also wanted a mix of hardware and software. We didn’t know what we’d get, but we have companies coming from Japan, South Africa, New Zealand France — companies building great companies in education, in pain management . . .

    How far along are they?

    They’re pretty mature companies for the most part. Some have been building their companies for eight to ten years. Fove, which makes an eye-tracking head mounted display that lets users navigate using their eye movements, has a complete product that works and is amazing.

    Have these companies raised capital in the past?

    Some of them have some capital. [Fove, for example, passed through Microsoft Ventures Accelerator in London last summer.] But in general, venture capital hasn’t been focused on virtual reality too much yet, so in some cases, the companies hadn’t raised anything prior. We have a South African company that bootstrapped and figured out a way to get customers to pay for VR from the beginning.

    What size stake are you taking for your $100,000?

    We aren’t disclosing that. We looked at Y Combinator and other accelerators and incubators and tried to learn [from what they do].

    Just two companies you’ve accepted are hardware companies. Is that by design? Do you think most people will be creating virtual reality technology for platforms like Samsung Gear VR and the upcoming Oculus Rift?

    We didn’t have set targets, but in my opinion, the big companies know what they’re doing. There’s a lot of good hardware being built by great tech companies with deeper pockets; smartphone use will become more common, too. So software and content companies might be a little more of a fit [for this program].

    We also just saw so a lot of mind-blowing applications. We have a company, Psious, a smartphone-based tool that’s solving phobias by simulating heights and plane travel and spiders. Another, DeepStream, tackles pain management. Burn victims enter into a world of snow and it lessens their pain. A third company, Emblematic Group in L.A., is doing immersive journalism, showing reporters what it can feel like to be on the streets when a bomb goes off and hopefully making them more empathic in the process.

    Why announce the companies now? Why not wait until they’re ready to meet with investors at a demo day you’re staging in May?

    We want them to take advantage of their affiliation with River while they’re here in America. Some of them are already planning to move to San Francisco. Many of them are here for three months alone, and we want them to meet with the people they want to meet, including investors.

    Those investors will invariably be conjuring up exit scenarios. Aside from Facebook and its subsidiary Oculus, which acquired two VR companies last month, do we know what companies are actively shopping for VR technologies?

    The smartest companies. It’s the same for everything. Who’s going to buy the 360-degree action sports camera? Whoever is making cameras and wants to stay in business.

    You can find River’s full list of startups here:

    DeepStream VR
    Description: VR games for pain relief and rehabilitation
    Tag line: Virtual Reality games to relieve pain
    Founders: Howard Rose, Ari Hollander
    Discovr
    Description: immersive learning experiences about exploring the ancient world
    Founder: Josh Maldonado, Omar Charles, Professor Bernard Frischer
    Based in: Toronto, Canada
    Emblematic Group
    Description: immersive journalism in VR
    Founder: Nonny de la Pena
    EmergentVR
    Description: application to create, edit and share 360 VR experiences with the world using mobile phones
    Founders: Peter Wilkins, Chris Wheeler
    Website: n/a
    Fove
    Description: The world’s first headset to use eye tracking to create an immersive experience
    Founders: Yuka Kojima, Lochlainn Wilson
    Based in: Tokyo, Japan
    Innerspace
    Description: high quality VR content focused on artistic and cultural expression
    Founder: Balthazar Auxietre and Hayoun Kwon
    Based in: Paris, France
    Psious
    Description: platform for mental health practitioners to help patients cure fears using immersion therapy in VR
    Founders: Xavier Palomer, Danny Roig
    Based in Spain
    Reload Studios
    Description: independent game studio made of ex-Call of Duty developers and ex-Disney artists
    Founder: James Chung
    SDK
    Description: VR for industrial training
    Founders: Shaun Wilson, Christian Yves Fongang
    Based in: South Africa
    Solirax
    Description: education platform for exploration, discovery and creativity
    Founders: Tomas Mariancik and Karel Hulec
     
    Thotwise
    Description: indie game studio focusing on exploration and suspense
    Founder: Ariel Arias
    Based in: Argentina
    Website: thehumgame.com
    Triggar
    Description: 360-degree capture camera and system
    Founders: Bruce Allan and Rob Allan
    Based in: Australia
    Vantage VR
    Description: 180 degree viewing experience for concerts and live events
    Tag line: Ticketmaster for VR events
    Founders: Juan Santillan, Michael Richardson
    Website: vantage.tv
     

    Connie

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  • StrictlyVC: August 13, 2014

    Good Wednesday morning, everyone. Semil Shah here, filling in for Connie while she takes a little time off. If you want to chat about today’s column or anything else, you can always find me on Twitter at @semil.

    —–

    Top News in the A.M.

    Tech giants are at odds over how the government should protect users in the era of big data, with Microsoft among those calling for new federal standards, and Facebook, Google, and Yahoo arguing for self-regulation. The Hill has more here.

    ——

    Chatting with Tommy Leep of Rothenberg Ventures

    Earlier this year, Tommy Leep joined San Francisco-based Rothenberg Ventures as a partner after spending more than two years at Floodgate as its “chief connector,” helping entrepreneurs get their startups off the ground. We recently chatted with Leep — who was once a product manager at Intuit — about the move, as well as the role that serendipity often plays in the career of the investor.

    You recently finished up a tour of duty with Floodgate to join Rothenberg Ventures. Walk us through your transition, what you learned, and why you ended up where you did.

    At Floodgate I learned that I love being a “connector.” I love connecting startup founders with people who can resolve their needs. The problem is that no one focuses on recruiting connectors. It doesn’t sound tangible enough. So I had to figure out how I could keep doing this thing I love.

    At first, I thought it may be a big tech company. I considered a corporate development role with one company and a community role with another, both of which excited me but [were] too focused on [each] company’s outcome. Those conversations helped me realize that I work best with a broad set of constituents that includes founders, investors, big companies and startup supporters. Then I realized that the best opportunity for me was right under my nose [with] my roommate and Stanford friend Mike Rothenberg, [who] had founded Rothenberg Ventures.

    Can you retell the story of how you fell into the venture world? I think it could be instructive for younger folks out there, given how random it is and how much of it is driven via personal relationships.

    I met Mike Maples at the Orange Bowl in Miami in January 2011. Before the game there was a rumor going around that Bon Jovi was performing at a private tailgate in a big tent. A friend who had been the Stanford Tree band mascot somehow got wristbands to this tailgate, so we went in. (I was also a Stanford Tree.) We were grabbing burgers when I ran into Weston McBride, a Sigma Nu fraternity friend from undergrad. Weston had pitched Mike a couple weeks earlier, and he offered to introduce me to him there.

    We connected over Sigma Nu, which Mike helped restart when he was at Stanford. We talked about Stanford football and this shirt I was wearing that said “I Believe in Stanford Football” . . .[and] Mike asked for one and he emailed me a reminder on the spot. . . A month later we met for breakfast at Hobee’s at Town & Country in Palo Alto for the shirt hand-off, and after that he interviewed me to become Floodgate’s first associate.

    Mike and Ann from Floodgate have legendary reputations in the world of early-stage investing. You had a front-row seat. Briefly, what sticks out in your mind about what makes them so good?

    Mike and Ann stick to first principles. They do right by the founders they work with. They have deep expertise in giving founders strategic guidance to build their businesses. They measure and learn from their investments and misses. And supporting founders is authentic to their personal missions.

    At Rothenberg Ventures, how is the fund and platform set up? How do you work to attract the best founders to your firm?

    At Rothenberg Ventures, we are very different from most other firms. We don’t spend Mondays in meetings and we don’t sit on boards. . . We offer on-call advisory to our founders, connect with almost all of them each month, and help connect our founders to the people they need to meet to help build their businesses. We believe in extreme giving . . . Our capital comes from a hundred founders and investors who also love giving back to founders and the venture community. We facilitate interactions through dozens of tech talks, dinners, small gatherings, and events like [a recent event for founders at AT&T Park in San Francisco]. . . For example, one of our recent initiatives is a co-working space in SOMA where we work side by side with 60 entrepreneurs. Our founders identify with us because we look like them — we’re a startup investing in other startups.

    ——

    New Fundings

    360fly, a 16-year-old, Pittsburgh, Pa.-based company that makes a single-lens camera and software platform that captures stitchless 360-degree video, has raised $17.8 million in Series B funding led by Qualcomm Ventures, Catterton, Voxx International and Steve Altman, former president and vice chairman of Qualcomm.

    Acupera, a three-year-old, San Francisco-based maker of analytics and workflow management software for medical teams, has raised $4 million in Series A funding led by Lightspeed Venture Partners, with Whittemore Collection participating.

    AdStage, a two-year-old, San Francisco-based ad management platform, has raised $6.25 million in Series A funding from Verizon Ventures, Digital Garage, Newbury Ventures, Freestyle Capital, and Chris Noble and Neal Dempsey of Bay Partners. The company has now raised $8.75 million altogether, shows Crunchbase.

    Electric Imp, a three-year-old, Los Altos, Ca.-based company whose chip, “imp,” provides WiFi and cloud-based internet connectivity services to any electrical device, has raised $15 million in Series B funding from new investors Foxconn Technology Group, PTI Ventures and Rampart Capital. Earlier investors Redpoint Ventures and Hugo Fiennes, chief executive and co-founder of Electric Imp, also participated in the round, which brings the company’s total funding to $22.9 million.

    GetTaxi, a four-year-old, Tel Aviv-based, Uber-like mobile app that operates in 24 cities in Israel, has raised $150 million in new funding, reports Globes. One-sixth of the funding comes from the Swedish fund manager Vostok Nafta Investment, which tells Globes that “[a]lthough competition is ripe everywhere, we think a conservative scenario is that GetTaxi becomes the leading player in Russia and Israel,” giving GetTaxi a potential valuation of more than $2 billion in “a couple of years.”

    Lookout, a seven-year-old, San Francisco-based security software maker for mobile devices, has raised $150 million in Series F funding, led by T. Rowe Price, which was joined by new investors Morgan Stanley, Goldman Sachs, Bezos Expeditions and Wellington Management Company. Earlier backers Andreessen Horowitz, Accel Partners, Index Ventures, Mithril Capital Management and Khosla Ventures also participated in the round, which brings the company’s total funding to roughly $282 million.

    Niveus Medical, a six-year-old, Palo Alto, Ca.-based company whose medical device uses electrodes to keep muscle groups strong during patient recovery, is raising $3.6 million in new funding, shows an SEC filing that was first flagged by MedCity News. The company had previously raised $2 million from a syndicate that included Band of Angels, Life Science Angels, Sand Hill Angels and others.

    RelayRides, a six-year-old, San Francisco-based peer-to-peer car sharing marketplace, has raised $10 million in new funding just six weeks after initially closing a $25 million Series B round. The new capital comes from Trinity Ventures; earlier investors in the Series B included Canaan Partners, August Capital, Google Ventures and Shasta Ventures. The company has raised at least $43.2 million to date, according to Crunchbase, which lists at least one round that included an unknown amount of funding.

    Seventh Sense Biosystems, a six-year-old, Cambridge, Ma.-based company behind a new type of blood collection and diagnostics platform, has raised $16 million in Series B financing from new investors, including Siemens Venture Capital, Novartis, and Laboratory Corporation of America Holdings. Earlier investors Flagship Ventures and Polaris Partners also participated in the round, which brings the company’s total funding to $26 million, shows Crunchbase.

    —–

    IPOs

    The WSJ looks at the public offering of Israeli drug development company Vascular Biogenics, calling it “one of the most creatively botched IPOs in memory.”

    —–

    Exits

    Onswipe, a four-year-old, New York-based startup that allows publishers to create tablet- and smartphone-optimized versions of their websites, has been acquired by the ad tech company Beanstock Media for an undisclosed amount of cash and stock. Beanstock is self-funded. Onswipe had raised $6 million from investors, including Lerer Hippeau Ventures, SV Angel, Morado Venture Partners, Eniac Ventures, Thrive Capital, and Spark Capital.

    Zofari, a two-year-old, San Francisco-based local recommendation app that helps match users with places they’re likely to enjoy visiting, has been acquired by Yahoo. Terms of the deal aren’t being disclosed, but Zofari’s four employees are joining Yahoo, reports TechCrunch.

    —–

    People

    Edward Snowden gives NSA whistleblower James Bamford the most extensive interview about his story to date, saying he intended to make it fairly clear to the NSA which documents he took and copied, so he would be seen as a whistle-blower and not a spy for a foreign government. “I figured [the NSA] would have a hard time” finding his trail of digital bread crumbs, Snowden says. “I didn’t figure they would be completely incapable.”

    According to BuzzFeed, a standoff between the Winklevoss twins and debtholders killed the discount-tracking app they’d invested in, Hukkster. More here.

    —–

    Job Listings

    Amazon is looking for a director of corporate development to focus on Amazon Web Services. The job is in Seattle.

    —–

    Essential Reads

    Amazon has unveiled its own mobile card readers and — surprise — it “savagely” undercuts both Square and PayPal on price.

    LinkedIn expects to create a new billion-dollar business in three years. Business Insider has the details.

    —–

    Detours

    Chinese scientists have used x-rays to image the blood vessels in a heart with unprecedented detail. The trick? Injecting it with liquid gallium.

    Why it’s probably best to avoid antibacterial soaps.

    Audrey Hepburn’s granddaughter, photographed by Richard Avedon’s grandson.

    —–

    Retail Therapy

    A handy wind-up shredder, for, you know, orgami art, destroying documents on the fly, etc.

    Now you can fly private, on the cheap.

    —-

    To sign up for StrictlyVC, click here. To advertise, click here.

    Connie

    ,

  • Chatting with Tommy Leep of Rothenberg Ventures

    Tommy LeepBy Semil Shah

    Earlier this year, Tommy Leep joined San Francisco-based Rothenberg Ventures as a partner after spending more than two years at Floodgate as its “chief connector,” helping entrepreneurs get their startups off the ground. We recently chatted with Leep — who was once a product manager at Intuit — about the move, as well as the role that serendipity often plays in the career of the investor.

    You recently finished up a tour of duty with Floodgate to join Rothenberg Ventures. Walk us through your transition, what you learned, and why you ended up where you did.

    At Floodgate I learned that I love being a “connector.” I love connecting startup founders with people who can resolve their needs. The problem is that no one focuses on recruiting connectors. It doesn’t sound tangible enough. So I had to figure out how I could keep doing this thing I love.

    At first, I thought it may be a big tech company. I considered a corporate development role with one company and a community role with another, both of which excited me but [were] too focused on [each] company’s outcome. Those conversations helped me realize that I work best with a broad set of constituents that includes founders, investors, big companies and startup supporters. Then I realized that the best opportunity for me was right under my nose [with] my roommate and Stanford friend Mike Rothenberg, [who] had founded Rothenberg Ventures.

    Can you retell the story of how you fell into the venture world? I think it could be instructive for younger folks out there, given how random it is and how much of it is driven via personal relationships.

    I met Mike Maples at the Orange Bowl in Miami in January 2011. Before the game there was a rumor going around that Bon Jovi was performing at a private tailgate in a big tent. A friend who had been the Stanford Tree band mascot somehow got wristbands to this tailgate, so we went in. (I was also a Stanford Tree.) We were grabbing burgers when I ran into Weston McBride, a Sigma Nu fraternity friend from undergrad. Weston had pitched Mike a couple weeks earlier, and he offered to introduce me to him there.

    We connected over Sigma Nu, which Mike helped restart when he was at Stanford. We talked about Stanford football and this shirt I was wearing that said “I Believe in Stanford Football” . . .[and] Mike asked for one and he emailed me a reminder on the spot. . . A month later we met for breakfast at Hobee’s at Town & Country in Palo Alto for the shirt hand-off, and after that he interviewed me to become Floodgate’s first associate.

    Mike and Ann from Floodgate have legendary reputations in the world of early-stage investing. You had a front-row seat. Briefly, what sticks out in your mind about what makes them so good?

    Mike and Ann stick to first principles. They do right by the founders they work with. They have deep expertise in giving founders strategic guidance to build their businesses. They measure and learn from their investments and misses. And supporting founders is authentic to their personal missions.

    At Rothenberg Ventures, how is the fund and platform set up? How do you work to attract the best founders to your firm?

    At Rothenberg Ventures, we are very different from most other firms. We don’t spend Mondays in meetings and we don’t sit on boards. . . We offer on-call advisory to our founders, connect with almost all of them each month, and help connect our founders to the people they need to meet to help build their businesses. We believe in extreme giving . . . Our capital comes from a hundred founders and investors who also love giving back to founders and the venture community. We facilitate interactions through dozens of tech talks, dinners, small gatherings, and events like [a recent event for founders at AT&T Park in San Francisco]. . . For example, one of our recent initiatives is a co-working space in SOMA where we work side by side with 60 entrepreneurs. Our founders identify with us because we look like them — we’re a startup investing in other startups.

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

    Connie

    , , , ,

  • Trusted Insight, the Social Network For LPs, Looks to Next Round

    Trusted Insight LogoTrusted Insight is a four-year-old, New York-based platform that has made itself valuable to institutional investors – 100,000 of them and counting – by giving them a place to research one another, scout out new deals and trends, and connect on due diligence — all with the help of advanced algorithms and semantic analysis.

    Now the 16-person company is gearing up for its next phase, suggests cofounder Alex Bangash, who previously founded Rumson Group, an advisory firm that specialized in private equity and venture investments.

    Most notably, the company will be unleashing some financial products of its own, though Bangash won’t be more specific than that today, citing competitors that are copying Trusted Insight down to “features we want to throw away.” He merely says to “think of us as the Netflix of investment management. Netflix can create ‘House of Cards.’ We can [create our own offerings] in this business, too.”

    Trusted Insight is also preparing to open its doors a bit wider to “different tribes,” says Bangash, who cites fund managers, companies, and “high net worths” who are accredited but don’t necessarily have a billion dollars behind them. (The platform will “still retain its exclusivity,” he insists.)

    Trusted Insight also has numerous new features up its sleeve, including “certifications” that help to highlight who is truly expert in what, regardless of their academic credentials.

    As for how it achieves what’s on its road map, Bangash says the company has three options, including organic growth. To wit, Bangash says Trusted Insight is poised to double or even triple its user base in the next year, as well as to increase the data it’s managing by five times. Considering that a “small but meaningful portion” of its 100,000 members already pay for one of Trusted Insight’s varying tiers of service, which range in price from $99 to $499 per month, the platform could “be a very large business on [its software-as-a-service fees] alone,” he says.

    A second option includes partnering with another outfit (Bangash says Trusted Insight is “talking with two or three players”) or raising a big fat round of funding, which seems like the most likely scenario. Already, Data Collective, Founders Fund, RRE Ventures, Morado Ventures, Real Ventures, and 500 Startups are among those that have invested an undisclosed amount of money in Trusted Insight. And Bangash says he’s been receiving “inbound interest from prestigious investors” anew.

    Either way, Bangash sounds confident in the network effects that Trusted Insight now enjoys, noting that “someone could develop a nicer LinkedIn, too, but people probably wouldn’t use it.” The trick going forward is turning Trusted Insight from a “transformational company,” as he calls it, into a transactional one.

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    Connie

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