• At Venture Firms, Balancing Brands Within Brands

    size-500x500There was a time in venture capital when it was almost unthinkable for investing professionals to make personal bets on startups outside their firms. That seemingly began to change about a decade ago. For example, after Accel Partners made an early bet on Facebook that would prove among the most lucrative in venture history, the high-profile partner who’d taken a seat on Facebook’s board, Jim Breyer, began backing a variety of companies through a personal fund, Breyer Capital. Tim Draper, a cofounder of DFJ, similarly began making investments unrelated to DFJ long before leaving an active investing role at the firm in late 2013.

    Whether VCs are doing more angel investing today is an open question; no one yet tracks their collective personal investments. But it’s a rare week when at least some funding announcements don’t feature VCs who are backing startups with their own checks.

    It’s easy to appreciate why. Sometimes, the investments being made are too small for a fund, or they fall outside a firm’s wheelhouse. In a crowded landscape, the brand of an individual VC can also help a firm win competitive deals; allowing the VC’s involvement in as many promising companies as possible is a means toward that end.

    But there are pitfalls. For one thing, conflicts can arise. If a VC has a personal stake in a new productivity app, what happens if another partner brings a different, competing productivity app into the firm? An employee’s headspace can be taken up by a company that’s not part of the firm’s portfolio. You could probably also argue that every side deal a VC makes undermines the decision-making process of his or her partners — especially in cases where those angel investments turn into home runs.

    The last is a particularly thorny issue for a firm’s LPs. Says one San Francisco-based institutional investor: “If an investor funds a company that hits it big, and the firm isn’t in it, the LPs are going to be mad. They’re going to ask why the hell wasn’t the fund in that deal.”

    Still, done right, the trend can be a win for everyone involved. First, side deals can become portfolio companies. Bill Pescatello, a partner at Lightbank in Chicago, has made three angel investments outside his firm, all startups where he “had a direct connection with the founders and/or a very specific connection to the business through my own interests.”

    Pescatello adds that in each case, he ran the investment opportunity by Lightbank, which passed on two of the startups but has funded the third.

    Niko Bonatsos, a principal at General Catalyst Partners in Palo Alto, Ca., has similarly made two “unique” investments that he first ran past his partners. One of of his checks went to Raise, a Chicago-based gift card marketplace that has since attracted $81.2 million from investors, including $56 million that the company announced just last month. New Enterprise Associates led the deal.

    Bonatsos also personally invested in the 2.5-year-old, Atlanta, Ga.-based anonymous messaging startup Yik Yak. When Bonatsos wrote a check to Yik Yak – he was its first angel investor — it was barely a speck on anyone’s radar. Last November, the company announced $62 million in funding led by Sequoia Capital. (The company has raised $73 million altogether.)

    Bonatsos — who scans roughly 30 newsletters and outlets before he starts his day each morning – notes that both were risks, particularly given that principals don’t necessarily have the same bank balance as more established VCs.

    He is also quick to add that his firm’s “interests always come first. I’m first and foremost a General Catalyst team member.” Sometimes, he explains, “a founder doesn’t want to raise capital from a venture capital firm right away, and in order for the firm to maintain a relationship with that entrepreneur, it makes sense for someone at the firm to write a personal check.”

    In fact, says Bonatsos, if General Catalyst opts to invest in either company down the road, he’ll sell the firm his stake at cost, per a standard arrangement with the firm.

    Of course, General Catalyst could also pass again. Yik Yak was the sixth most popular social networking app in the world three months ago, according to the analytics firm App Annie. Right now, it’s the 24th most popular social networking app.

    “If the VC firm doesn’t [acquire an employee’s stake later], you’re stuck with the angel investment,” says Bonatsos, acknowledging the possibility.

    “If things work out, it’s great for you. But there’s also a good chance you’ll lose your money.”

    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: November 17, 2014

    Good morning, everyone! Hope you had a wonderful weekend. (Web visitors, here’s an easier-to-read version of today’s email.)

    —–

    Top News in the A.M.

    Facebook to enterprises: You want workplace collaboration tools? We’ve got your workplace collaboration tools.

    Sometimes, a record-breaking IPO isn’t enough. According to Reuters, Chinese e-commerce giant Alibaba will be sounding out investors this week as it mulls its first bond offering. (The WSJ talks with cofounder Joe Tsai about some of the company’s other plans here.)

    —–

    Tim Draper on Life Outside DFJ

    Almost exactly a year ago, Fortune reported that billionaire investor Tim Draper would no longer be actively investing on behalf of DFJ, the firm he cofounded in 1985. As the news rippled throughout VC circles, Draper wrote StrictlyVC to clarify that was “not leaving DFJ. Ever. I am just skipping a fund to do some work building Draper University and experimenting with new models for venture capital. He added: “I will of course be an investor in any new fund we create.”

    Draper, already known for his boundless energy, has seemingly been in overdrive since. In addition to his involvement with his 1.5-year-old Draper University — once characterized as an “unconventional boarding school for aspiring tech moguls” — Draper has become a highly active seed-stage investor. He’s betting heavily on bitcoin, too. In fact, in July, he purchased the 30,000 bitcoin seized when the feds took down the online drug bazaar Silk Road in October 2013. That’s saying nothing of his efforts this year to get an initiative on the California ballot to carve the state into six “startup” states. (It failed to qualify.)

    How does he find the time? StrictlyVC asked Draper if he could answer a few questions about the past year; we emailed this past weekend in an exchange that has been edited lightly for length.

    Last year, you said you decided to “skip a fund” at DFJ. How are you feeling one year later?

    Everything I do helps all my funds, whether they be DFJ or Draper Associates [Draper’s seed fund].

    Draper University; Boost.vc [son Adam’s investment fund], Hero City [Draper University’s coworking space]; and my long history in the VC world have all become an amazing source of deal flow.

    What’s been the best part about this past year? What’s been the most challenging?

    The best part is that I am able to innovate in the finance world. There are some things that can be done better for the entrepreneurs, and some that can be done better for the LPs. There are also some real technological innovations that are happening that I have been able to identify and apply to venture capital [including around bitcoin].

    Also, [Draper University] has provided me a new vehicle for investment, new contacts I never would have made without it, and innovations I never would have seen without it.

    The most challenging [thing for me] has been the sheer volume of opportunities I now have for investment.

    You seem to be investing more actively than ever.

    I think I am at my normal pace.

    Would you ever raise institutional funding again?

    Yes.

    What percentage of your bets this past year have been bitcoin-related?

    Maybe 20 percent and rising.

    When you successfully bid on those 30,000 bitcoin, you told Dealbook that you wanted to provide liquidity to markets that have been hamstrung by weak currencies. First, have you ever disclosed how much you paid? More importantly, how are you executing on that plan?

    We have done it. [Editor’s note: Here, Draper points me to his portfolio company Mirror, formerly Vaurum, an exchange platform for bitcoin investors.] And the price I paid for the bitcoin was higher than the current price, but my belief is that the price of bitcoin will exceed $10,000 within three years because the infrastructure is being built that will lay the groundwork for universal adoption. We will be using bitcoin for transactions and all we will know is that the transaction was made faster, smoother and cheaper than it would have been with just fiat currency.

    Will you invest as actively in bitcoin in 2015 or have you covered a lot of your bases at this point?

    This is just the tip of the iceberg. I expect bitcoin and the blockchain to be as prevalent in banking, commerce and finance as the Internet is in information, communications and software.

    A lot of very smart people are divided about bitcoin. Like you, Marc Andreessen is a famous bull. In contrast, Peter Thiel recently said that he’s skeptical, that it’s “not obvious how easy it is to get a seamless payment system attached to [bitcoin].”

    It is happening. I look forward to giving Peter a tour of Draper University and Hero City. Marc has already been there.

    Andreessen and Thiel have also become very public figures. Meanwhile, you did a lot of press around your Six Californias initiative, but as an investor, you seem to have pulled back.

    We just finished up another amazing session at Draper University. We are challenging the count at Six Californias. Draper Associates has been making some brilliant investments that I expect to have even greater outcomes than those I have made in the past. We have news cycles, too.:)

    Your three children are now making their own startup bets. What’s the best piece of advice you’ve given them about being investors in Silicon Valley?

    Yes, Jesse, the Valley Girl, is one of the top supporters of women in entrepreneurship, and she has made some exciting investments. My son Adam is running Boost.vc, and my son Billy works with me making investments for Draper Associates. They all look at the world as something that can be improved through entrepreneurship. [The] best piece of advice [I’ve given them]: “Fail and fail again until you succeed.”

    —–

    New Fundings

    Axcient, an eight-year-old, Mountain View, Ca.-based company whose data protection service aims to make online backup simple for smaller businesses, has raised $10 million in Series E funding, according to anSEC filing that lists a $13.2 million target. The company had previously raised at least $64.2 million, including from Allegis Capital, Scale Venture Partners, and Thomvest Ventures.

    BeiGene, a four-year-old, Beijing-based biotech company that develops targeted and immune-oncology therapeutics, has raised 450 million yuan ($75 million) in Series A funding from new investors CITIC Capital Partners, Hillhouse Capital, and an undisclosed U.S. public-investment fund, along with earlier, unnamed angel investors.

    Bion Pharma, a new, Princeton, N.J.-based company that aims to help Indian and European drug makers receive regulatory clearance and expand their distribution rights in the U.S., has raised $21 million from two investors, according to an SEC filing that shows a $30 million target. Bio was founded by five U.S.-based execs who left Indian generic drugmaker Ranbaxy last month. MedCity News has the story.

    Curatio Healthcare, a nine-year-old, Chennai, India-based mobile healthcare engagement platform, has raised Rs 100 crore ($16.2 million) from Sequoia Capital in exchange for a reported 20 to 25 percent stake. Times of India has more here.

    InsightSquared, a four-year-old, Cambridge, Ma.-based business intelligence company, has raised $13.5 million in Series C funding from earlier backers Atlas Ventures, DFJ, and NextView Ventures along with new investor Two Sigma Ventures. The company has now raised $27 million to date.

    Into the Gloss, a four-year-old, New York-based beauty site and maker of its own skin and beauty products that ship directly to consumers, has raised $8.4 million from Thrive Capital and other investors, says VentureWire. The company had earlier raised $2 million in seed funding from Lerer Hippeau Ventures and Forerunner Ventures.

    Onename, a 1.5-year-old, New York-based company that makes it easy for anyone to be listed in the directory for Bitcoin, has raised $1.5 million in seed funding Union Square Ventures, with participation from Barry Silbert, Naval Ravikant, Cyan and Scott Banister, SV Angel, High Line Venture Partners, and others. Onename graduated from Y Combinator’s Summer 2014 batch. VentureBeat has more here.

    Scaled Inference, a six-month-old, Palo Alto, Ca.-based startup that’s building a cloud-based platform for third parties that want to use artificial intelligence and machine learning tools to run their apps and services, has raised $8 million in Series A funding from Khosla Ventures. The company has now raised $13.6 million, following a seed round earlier this year that included Tencent and Felicis Ventures, among others. TechCrunch hasmore here.

    Sliced Investing, a months-old, San Francisco-based graduate of this summer’s Y Combinator class, has raised $2 million in seed funding to pursue its plans to bring crowd funding to hedge funds. Participants in the round include Khosla Ventures, Data Collective, and TriplePoint Venture Growth.

    SomaLogic, a 15-year-old, Boulder, Co.-based clinical diagnostics company that provides protein detection equipment and more to its customers, has raised $16.5 million, including from Novartis AG, which recently extended a research agreement with SomaLogic. CEO Byron Hewett tells VentureWire that the company, which has raised more than $200 million over the years, is targeting $40 million for this current round.

    SysCloud, a four-year-old, Cranford, N.J.-based company that sells a suite of tools that provides protection for data in Google Apps through real-time backups, has raised $2.5 million in Series A funding led by Inventus Capital Partners, with participation from earlier investor KAE Capital.

    —–

    IPOs

    FibroGen, a 21-year-old, San Francisco-based company that’s developing drugs in anemia, fibrosis and cancer, debuted on Nasdaq Friday, after pricing 8.1 million shares at $18 apiece, near the top of its projected range of $16 to $19 per share; its shares closed the day at $22 per share.

    —–

    People

    Karen Mills, Obama’s former SBA chief, is now working part-time at Harvard Business School. She’s also writing checks as an angel investor, often alongside General Catalyst Partners, reports BostInno.

    Mahbod Moghadam, the ousted co-founder of Genius.com (formerly Rap Genius) posted a how-to story on Friday that’s generating a lot of attention, and not the good kind. Moghadam wrote about shrinking his tab at Whole Foods by switching price tags, pocketing fruit, putting pricey food in soup containers and (unfortunately) much, much more.

    Michael Solomon and Rishon Blumberg, longtime talent agents, have begun serving as agents for desirable developers, and their firm, 10x, is crushing it, reports the New Yorker in an entertaining new profile.

    —–

    Job Listings

    Bridge Ventures, a U.K.-based investment firm that funds businesses that are located in or serve underserved communities, is looking for a partner in New York.

    Golden Seeds, an early-stage firm focused on women-led businesses, is looking for a venture fund analyst. The job is in New York.

    —–

    Essential Reads

    The future of Google Glass grows cloudier.

    —–

    Detours

    Baltic Sea photography.

    Fastest roast turkey.

    Three years ago, he was flipping burgers at McDonald’s. Today Matt Haag, 22, skinny and blindingly pale, makes more than $1 million a year by playing the popular war game Call of Duty.

    —–

    Retail Therapy

    Oh, hey, for the right price, the first official Batmobile can now be yours.

    Connie

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  • Tim Draper on Life Outside DFJ

    tim-draperA year ago, Fortune reported that billionaire investor Tim Draper would no longer be actively investing on behalf of DFJ, the firm he cofounded in 1985. As the news rippled throughout VC circles, Draper wrote StrictlyVC to clarify that he was “not leaving DFJ. Ever. I am just skipping a fund to do some work building Draper University and experimenting with new models for venture capital. He added: “I will of course be an investor in any new fund we create.”

    Draper, already known for his boundless energy, has seemingly been in overdrive since. In addition to his involvement with his 1.5-year-old Draper University — once characterized as an “unconventional boarding school for aspiring tech moguls” — Draper has become a highly active seed-stage investor. He’s betting heavily on bitcoin, too. In fact, in July, he purchased the 30,000 bitcoin seized when the feds took down the online drug bazaar Silk Road in October 2013. That’s saying nothing of his efforts this year to get an initiative on the California ballot to carve the state into six “startup” states. (It failed to qualify.)

    How does he find the time? StrictlyVC asked Draper if he could answer a few questions about the past year; we emailed this past weekend in an exchange that has been edited lightly for length.

    Last year, you said you decided to “skip a fund” at DFJ. How are you feeling one year later?

    Everything I do helps all my funds, whether they be DFJ or Draper Associates [Draper’s seed fund].

    Draper University; Boost.vc [son Adam’s investment fund], Hero City [Draper University’s coworking space]; and my long history in the VC world have all become an amazing source of deal flow.

    What’s been the best part about this past year? What’s been the most challenging?

    The best part is that I am able to innovate in the finance world. There are some things that can be done better for the entrepreneurs, and some that can be done better for the LPs. There are also some real technological innovations that are happening that I have been able to identify and apply to venture capital [including around bitcoin].

    Also, [Draper University] has provided me a new vehicle for investment, new contacts I never would have made without it, and innovations I never would have seen without it.

    The most challenging [thing for me] has been the sheer volume of opportunities I now have for investment.

    You seem to be investing more actively than ever.

    I think I am at my normal pace.

    Would you ever raise institutional funding again?

    Yes.

    What percentage of your bets this past year have been bitcoin-related?

    Maybe 20 percent and rising.

    When you successfully bid on those 30,000 bitcoin, you told Dealbook that you wanted to provide liquidity to markets that have been hamstrung by weak currencies. First, have you ever disclosed how much you paid? More importantly, how are you executing on that plan?

    We have done it. [Editor’s note: Here, Draper points me to his portfolio company Mirror, formerly Vaurum, an exchange platform for bitcoin investors.] And the price I paid for the bitcoin was higher than the current price, but my belief is that the price of bitcoin will exceed $10,000 within three years because the infrastructure is being built that will lay the groundwork for universal adoption. We will be using bitcoin for transactions and all we will know is that the transaction was made faster, smoother and cheaper than it would have been with just fiat currency.

    Will you invest as actively in bitcoin in 2015 or have you covered a lot of your bases at this point?

    This is just the tip of the iceberg. I expect bitcoin and the blockchain to be as prevalent in banking, commerce and finance as the Internet is in information, communications and software.

    A lot of very smart people are divided about bitcoin. Like you, Marc Andreessen is a famous bull. In contrast, Peter Thiel recently said that he’s skeptical, that it’s “not obvious how easy it is to get a seamless payment system attached to [bitcoin].”

    It is happening. I look forward to giving Peter a tour of Draper University and Hero City. Marc has already been there.

    Andreessen and Thiel have also become very public figures. Meanwhile, you did a lot of press around your Six Californias initiative, but as an investor, you seem to have pulled back.

    We just finished up another amazing session at Draper University. We are challenging the count at Six Californias. Draper Associates has been making some brilliant investments that I expect to have even greater outcomes than those I have made in the past. We have news cycles, too.:)

    Your three children are now making their own startup bets. What’s the best piece of advice you’ve given them about being investors in Silicon Valley?

    Yes, Jesse, the Valley Girl, is one of the top supporters of women in entrepreneurship, and she has made some exciting investments. My son Adam is running Boost.vc, and my son Billy works with me making investments for Draper Associates. They all look at the world as something that can be improved through entrepreneurship. [The] best piece of advice [I’ve given them]: “Fail and fail again until you succeed.”

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

    Connie

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  • Yik Yak: The Startup in Twitter’s Rearview Mirror

    yik-yak-appYik Yak, an app that acts like a local bulletin board, allowing users within a 1.5-mile range to post to it anonymously, hasn’t received nearly as much press as other anonymous apps, including Whisper and Secret. It’s seeing much more user pick-up, though. As of last night, Yik Yak was the 27th most downloaded free app in the U.S., right behind Twitter, according to app analytics company App Annie. It was also the sixth most downloaded social media app. Twitter was ranked fifth.

    The year-old, Atlanta-based company is almost exclusively a college-based phenomenon for now – and very much by design. Indeed, in August, Yik Yak hired 140 campus “representatives” to plaster universities with its marketing materials, a campaign that appears to have been very effective, though Yik Yak doesn’t disclose user numbers.

    The question is whether the app makes sense beyond college campuses. Yesterday, StrictlyVC talked with Cameron Lester of Azure Capital, one of the company’s backers, about it. Our conversation has been edited for length.

    You found Yik Yak early on. How?

    We found it through outbound research. Anyone who spends time with millennials can see their growing lack of interest in the traditional Facebook experience and gravitation to mobile social; as we were forming a thesis around [what’s next], Yik Yak appeared on our radar. We reached out to one of the company’s seed investors who we know and we ended up participating in its [$1.5 million] seed round. When the company was raising a more formal amount — its $10 million Series A, which came together quickly — DCM led the round and we participated in it, investing well above our pro rata.

    Yik Yak is taking off on college campuses. Why is that, and can it grow beyond universities, or is that a big enough market?

    The advantages to [a college body] are numerous. Yik Yak isn’t offensive relative to some other social media apps that include photos, because from an anonymity perspective, photos create a big problem. The fact that it’s location based, bringing together users in a 1.5-mile radius, also provides a lot of contextual value, particularly if you have a demographic in that range that has a lot of affinity like college students. Yik Yak also [plays into] a big backlash against this concept of [a trackable] online identity. People want the same level of privacy online that they enjoy offline.

    In the meantime, we’re already starting to see Yik Yak bleed out into other places. This summer, for example, when people got off campus, networks sprung up on Wall Street, with Goldman Sachs interns bantering with Merrill Lynch interns. The same thing happened on Capitol Hill, with Democratic and Republican interns. And in summer, the user base was a fraction of what it is today.

    Yik Yak recently made it possible to peek into other Yik Yak feeds anywhere in the world. That would seem to have a lot of really interesting applications, including for journalists who right now rely heavily on Twitter for breaking news.

    Yes, you can now place a pointer on a map of the world and go to Moscow, Hong Kong, Dubai or elsewhere to see what’s going on. It’s pretty crazy. You can’t participate but you can see what’s happening. Basically, American college kids are [introducing it everywhere]. The company’s next phase of growth is urban areas around the globe.

    How will the company make money?

    Step one is to get to critical mass. But Yik Yak is uniquely positioned to monetize around local affinity. We’re living in sharing economy and all kinds of local services would love access to this kind of user base. You can also imagine sponsorships, local advertising through a model like Sponsored Tweets . . . That the audience is especially local and can be segmented provides unique revenue opportunities.

    Yik Yak has already been involved in cases of bullying. To keep the app out of the hands of high school students, who began using it to abuse one another earlier this year, the company had to draw a geofence around nearly every high school and middle school in the country. Do you worry about the liabilities or risk to your brand?

    Back in the spring, I had two middle school students – one just went to high school – and all that [bullying] stuff [in high schools] was going down and my reaction was: No way. Then my son came home and said, “They told us about this app that we shouldn’t use.” Then I was really thinking: No. But these founders are white hat guys; they’ve wanted to build something big and useful and benign from the beginning, and they’ve been very proactive about getting bullying and any kind of comments that shouldn’t be there off the system. I think if anything, we’re on the back side of this. I feel like if there was a risk, that’s already been largely alleviated and what we have to do is more of the same.

    Connie

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  • VCs Start Thinking More Creatively About AngelList

    The-ThinkerThis week, three-year-old Kima Ventures, a Paris-based seed fund that backs one to two startups a week, made headlines for a new way that it plans to use AngelList, the popular platform for startups and investors. As Kima’s cofounder Jeremie Berrebi told me, the firm will invest $150,000 a shot in up to 50 startups in exchange for a 15 percent equity stake in each company. Kima says the funds will be transferred to each winning startup within 15 days. Companies have to apply for the money on AngelList.

    Kima’s AngelList play may be the splashiest to date, but it’s one of a growing number of venture firms that’s looking for ways to work with AngelList in new and different ways.

    Indeed, AngelList’s months-old Syndicate’s platform, which allows a “lead investor” to syndicate investments on a deal-by-deal basis in exchange for carry, seems to be bringing out the creative side of many investors.

    Renowned VC Tim Draper, for example, told me recently via email that “I certainly plan to syndicate on AngelList.”  Draper wasn’t specific about a timeline or his plans, but he said it’s all part of the natural evolution of things. “I want launching a company to be a snap,” including the funding process, he wrote.

    Similarly Semil Shah, who manages a seed-fund called Haystack, recently voiced enthusiasm over Syndicates as we chatted over coffee in downtown San Francisco. “I’m not 100 percent sure how I’m going to use it,” he admitted, “but I’m definitely going to use it.”

    Jeff Fagnan, a partner at Atlas Venture, which has invested in AngelList, says Atlas has “identified a dozen very influential serial entrepreneurs and angels in Boston who we think could [further spur the growth of the startup] ecosystem [locally], and we’re telling them that anything they invest in as a lead [using the Syndicates platform], we’ll invest up to an additional $250,000 per any of their projects.”

    “I don’t think we know what kind of activity it will result in,” says Fagnan, but he says it beats “scout programs,” which he calls “archaic and wrong. It’s like, ‘You’re our scout. Bring us back some dealflow and we’ll throw you a few ducats.’” Atlas is open to anyone else joining a Syndicate that involves the firm. “We just want to promote as much early-stage innovation as possible,” he says.

    The firms won’t be the first to publicly embrace the platform; in October, Foundry Group, the Boulder, Colorado-based venture firm, said that it plans to start investing in startups using Syndicates. But they seem to signal that VCs would rather experiment with the platform than let it cannibalize their business.

    As Shah puts it, “After the noise of the launch of Syndicates, there’s going to long education process, and mistakes will be made. But we’ll definitely see a major venture capital firm” use the platform soon. “General frustration with [traditional] venture capital has been building up to the point that it’s inevitable,” he says.

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

    Related articles

    Connie

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  • StrictlyVC: November 20, 2013

    110611_2084620_176987_imageHappy Wednesday, and thank you for reading!

    —–

    Top News in the A.M.

    Tim Draper is leaving Draper Fisher Jurvetson, but not forever, he says, as was reported by Fortune yesterday afternoon. In an email to StrictlyVC last night, Draper said that Fortune “got it wrong. I am not leaving DFJ. Ever. I am just skipping a fund to do some work building Draper University and experimenting with new models for venture capital. I expect both my experimenting and my continued angel investing will provide great intelligence and deal flow to our team at DFJ. I will of course be an investor in any new fund we create.”

    Asked whether he will now be more involved with his personal investing vehicle, Draper Associates, which focuses on seed-stage opportunities, Draper wrote, “I started as an angel investor, and I continued throughout my career. It helps with deal flow, intelligence, etc.”

    Fortune reported yesterday that Draper isn’t the only one to be parting ways with the firm in the near future. According to its sources, cofounder John Fisher is also leaving, as are longtime managing directors Jennifer Fonstad and Don Wood and China investment chief Hope Chen. You can learn much more here. (Incidentally, StrictlyVC authored the now infamous cover story for which Draper posed as Captain America. For what it’s worth, it was the photographer’s last-minute idea, and Draper was very sporting about the whole thing.)

    —–

    In VC, Going it Alone, with Plenty of Company

    A growing number of venture firms have been springing up around a single general partner, including PivotNorth, led by Tim Connors; Acero Capital, led by Rami Elkhatib; Cowboy Ventures, led by Aileen Lee; and K9 Ventures, led by Manu Kumar.

    Now add to the list Cindy Padnos, the lone GP of Illuminate Ventures, an Oakland, Calif.-based outfit that is today announcing a new, enterprise-focused, $20 million fund. In a call on Monday, Padnos said she was able to raise the new pool after investing a “few million dollars” in an earlier, proof-of-concept “Spotlight Fund” that has taken off.

    Two of Spotlight’s five portfolio companies have been acquired: 3D game design platform Wild Pockets was purchased by Autodesk in 2010, and data and audience management platform Red Aril was acquired in 2011 by Hearst Corporation. (Terms of both deals remain private.) Meanwhile, the fund’s three other portfolio companies have been marked up considerably since Padnos invested. Among them: the SEO management platform company BrightEdge, which Illuminate backed as a Series A investor; the startup has gone on to raise nearly $62 million altogether, including from Battery Ventures, Intel Capital, and Insight Venture Partners.

    Padnos – a Booz, Allen consultant turned operator turned venture capitalist – gives a lot of credit for her success thus far to a venture partner in Seattle and an advisory counsel of roughly 40 people whom she has assembled over the years.

    She also believes she has struck on a strategy that clicks in a today’s market, investing in enterprise startups that are bootstrapped or angel financed but not quite ready for a large-scale Series A rounds.

    Indeed, Padnos — who says her “sweet spot” is writing initial checks of $500,000 as part of $1 million to $3 million rounds — has already made several new investments out of her new fund: Hoopla, a company that makes “workplace gamification” software; Influitive, a marketing company that analyzes data around social media; and Opsmatic, the newest startup by former Digg CEO Jay Adelson.

    Asked whether she is seeing any particularly interesting trends, Padnos tells me she’s most closely watching the “whole world of enterprise mobile.”

    But the growing group of single-founder firms that Illuminate has joined is fairly interesting, too.

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    New Fundings

    ALOHA, a two-year-old, New York-based company that makes nutritional supplements, has raised more than $4 million from a long list of investors, including First Round Capital, Highland Capital Partners, FF Angel, Khosla Ventures and Forerunner Ventures. ALOHA’s funding comes just one month after a similar product, out of San Francisco-based Soylent, attracted $1.5 million in seed funding.

    Apartment List, a two-year-old, San Francisco-based company that consolidates the apartment listings of numerous services into a vast, searchable database, has raised a $15 Million Series A investment round led by Matrix Partners.

    August, a year-old, San Francisco-based maker of a “smart” lock for doors that can be controlled through a smartphone, has raised $8 million in Series A funding. Maveron led the round with participation from Cowboy Ventures, Industry Ventures, Rho Ventures and SoftTech VC. The company previously raised $2 million in seed funding from long line of angel investors.

    FinanceIt, a three-year-old, Toronto-based company whose software platform enables its customers to offer point-of-sale financing to their own customers, has raised a $13 million Series A round from TTV Capital, Inter-Atlantic Group, and Second City Capital.

    LittleBits, a two-year-old, New York-based company that makes modular electronics that snap together for good-old user enjoyment, has raised a new, $11 million round of funding, according to an SEC filing that lists Joi Ito, True Ventures, and new investor Foundry Group. The funding appears to bring the capital that LittleBits has raised to date to around $15.5 million.

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    People

    Chris Dixon, the angel investor-turned-VC, talked with investor-entrepreneur Semil Shah this past weekend about why he no longer tweets as actively as he once did. “I actually think Twitter has changed,” said Dixon. “Part of it is Twitter just got more popular…For me, the golden days of Twitter were 2010 maybe, 2011, where it was a bunch of early adopter/startup people…now, everyone realizes that if you say something wrong, it’s going to be excerpted and put on Business Insider…so I just think everyone is vastly more on guard, and it’s just not as fun.” (Click here to watch more of Dixon’s sit-down with Shah.)

    Andy Rachleff, the former Benchmark GP turned CEO of Wealthfront, argues against being stingy when it comes to follow-on equity grants for employees. Here’s what he specifically suggests.

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    IPOs

    Yesterday, China‘s top securities regulator reiterated the country’s commitment to easing control over the IPO process, but he added that the government will intensify its audits of startups in order to prevent “more junk stocks.” (Reuters has much more here.) Last October, of course, the Chinese government banned IPOs because of volatility in the stock market and investor concerns over the financial reporting of some newly public companies.

    Trevena, a six-year-old, King of Prussia, Pa.-based clinical-stage biopharmaceutical company whose lead therapy is an intravenous treatment for acute decompensated heart failure, is scheduled to go public today. The offering is expected to raise $75 million and establish the company’s market cap at around $290 million. Trevena’s biggest shareholders include Alta Partners, HealthCare Ventures, New Enterprise Associates, and Polaris Venture Partners.

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    Exits

    Tier 3, a seven-year-old, Bellevue, Wash.-based enterprise cloud management startup, has been acquired by the Louisiana-based telecommunications heavyweight CenturyLink. Terms of the deal were not disclosed. Tier 3 had raised $18.5 million over the years from Intel Capital, Ignition Partners, and Madrona Venture Group.

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    Happenings

    Goldman Sachs Private Internet Company Conference gets underway in Las Vegas today. TechCrunch has its top-secret agenda, featuring the event’s speakers — who typically represent the startups that Goldman deems the most promising pre-IPO candidates. Unsurprisingly, the execs to present this year include Dave Goldberg of SurveyMonkey, Robert Hohman of Glassdoor, Carrie Dolan of LendingClub, Dave Gilboa of Warby Parker and, yes, Evan Spiegel of Snapchat.

    USB‘s annual, three-day Global Technology and Services Conference rolls into its second day in Sausalito, Calif. You can find the agenda here.

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    Data

    According to CB Insights, all these investments in “quantified self” companies — startups whose technologies monitor consumers’ fitness and stress levels, among other things — are starting to add up. In fact, the research firm says venture investments in both hardware and software-related startups have reached $318 million over the last year. You can find more data on the trend here.

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    Job Listings

    FT Partners, the San Francisco-based investment bank, is looking for an associate to join its SF office in a role that begins next July. According to the firm, associates are involved in “all aspects of originating and executing live transactions, including extensive financial modeling and analysis, company valuation, corporate and industry research, strategic analysis and recommendation, identification of business development opportunities, due diligence” etc. (You get the idea.) To apply, you need previous experience in investment banking, strategic consulting, venture capital, or in a similar industry that requires assigning value to companies.

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    Essential Reads

    Let’s face it. We don’t know a single useful number about the hottest company in tech.

    Facebook? Pinterest? Puh-lease. Venture-backed Wanelo is where the action is happening now, suggests Buzzfeed.

    Touring the new, New York offices of payments startup Square.

    It’s too soon to break out the champagne, but two separate but similar patent troll bills are moving their way up in the Senate and House of Representatives.

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    Detours

    George W. Bush is a surprisingly good artist, judging by this portrait of his daughter’s cat, Eleanor.

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    Retail Therapy

    Japanese company EntreX created a chip dispenser for people who get their arms stuck in Pringles cans. Alas, the dispenser was recently discontinued; apparently the market wasn’t big enough, which is unfortunate, as you could see the product being a good fit for members of Congress. (Zing!)

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    Connie

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