Gawker
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drugs
Which Venture Capitalist Is A Closet Pothead?
Justin Hartfield, the proprietor of online pot-dispensary locator WeedMaps, says a prominent VC has offered to buy the site himself — but doesn't want his employer's name aired in public. More »
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By Owen ThomasComment by seekingwhat: 420% of people in the United States are potheads. The rest are closet potheads. The other rest need to chill. 1 Responses | Other threads
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google
Google Venture Fund Run by Old Pal of Cofounder's Wife
Silicon Valley is a meritocracy. Yeah, right! Take a look at who's behind Google's new $100 million venture-capital fund, and you'll see how things really work in the cradle of technology. More »
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By Owen ThomasComment by Rock tha Hizzee: I'm assuming that they had a quota to fill: pasty white guy with a degree in Neuroscience from Middlebury College. He... 1 Responses | Other threads
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Shut Up, Twitter
Twitter Now Worth $230 Million, According to Investors
No money? No problem! Twitter doesn't have any actual revenues, but venture capitalists have poured another $35 million into its coffers, valuing the text-update service for hipster oversharers at $230 million. More »
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By Owen ThomasComment by Jason McCabe Calacanis: Quick note for those folks who've actually never built any business to scale in their lives (read Owen): When you... 5 Responses | Other threads
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schadenfreude
Facebook's Value: $3.7 Billion and Dropping
What's Facebook really worth? The fast-growing social network is adding to its 150 million users effortlessly. But revenues aren't growing as easily. And that has Mark Zuckerberg's company tied up in legal and financial knots. More »
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By Owen ThomasComment by Tamar Weinberg: This may belong in the previous day's post, but given that we're still focused on the recent ConnectU disclosure, I'm... 5 Responses | Other threads
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Shut Up, Twitter
Why Twitter Is the Perfect Startup
The financial world is in ashes. But that makes adorable little startup Twitter all the more precious. It is perhaps the only Internet dream left. And any economist will tell you that scarcity creates value. More »
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By Owen ThomasComment by Pope John Peeps II: "One could change the world with one hundred and forty characters." It's difficult to believe anyone who said anything this stupid... 2 Responses | Other threads
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venture capital
Shirt-Doffing Tech Investor Loves Washington's "Cancer on Nation"
Tim Draper, the name-dropping venture capitalist who funded Hotmail and Skype, met a bunch of Washington insiders like John McCain and Vernon Jordan. He loved them all. He also thinks they're a "cancer"! Go figure. More »
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By Owen ThomasComment by bytememehard: Too distracted by wacky eyebrows for pay attention to what he was saying. 1 Responses | Other threads
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recessionomics
Can Björk Save a Ruined Iceland?
Björk, the quirky Icelandic singer, is investing her very emotions in a fund for startups, in the hopes of turning her near-bankrupt country into a green paradise. Sort of!
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By Owen ThomasComment by BookishLookish: If she promises never to sing again, I'm good for $100 US. 9 Responses | Other threads
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black holes
It Costs Digg $5 Million a Year to Run the Internet
Perhaps Digg really is the future of the news business. The headline-discussion site, once an icon of the Web 2.0 movement, is losing millions of dollars a year.
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By Owen ThomasComment by surlybastard: Can someone please explain to me why Digg needs so much money to operate? 5 Responses | Other threads
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real estate
Bill Joy sells $40 million condo to Hugh Jackman at half off
Dreamily inventive billionaire Bill Joy, the cofounder of Sun Microsystems, has predicted doom for the human race in the pages of Wired. He has a new reason for pessimism: A Manhattan condo he put on the market for $40 million has reportedly sold to Australian actor Hugh Jackman for $21 million — down from a previously rumored sale price of $25 million. The five-bedroom, three-floor condominium has a view of the Hudson River. We have a theory on why Joy sold, even at such a discounted price. More »
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By Owen ThomasComment by Smitros: Thad headline begs for a punchline. 3 Responses | Other threads
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meltdowns
Why venture capital won't save your job
Those who fund young, growing companies love to tout their industry's role in job creation. Jobs — we could use some of those now, right? But with venture-capital firms like Sequoia Capital insisting on across-the-board layoffs, it's hard to buy that argument; jobs may be created at startups quickly, but they are just as rapidly destroyed. But startups aren't the only ones being pinched by venture capitalists — they're also taking their investors for a ride, according to an industry insider. More »
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By Owen ThomasComment by Shadowlayer: I've to say this is a real eye opener for me: I always thought deep in my mind that the... 1 Responses | Other threads
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nerdspotting
Facebook CFO in two places at once
We've always been impressed by Facebook CFO Gideon Yu's ability to snooker investors around the world. The list of people he's taken for a ride include Microsoft CEO Steve Ballmer and Hong Kong telecom mogul Li Ka-Shing. Just last Friday, he returned from a trip to Dubai, where he tried to shake loose some petrodollars from the Middle Eastern emirate's sovereign wealth funds. Some people seem to think Yu is still in Dubai. Which would be quite a feat, considering he's been spotted in Facebook's Palo Alto headquarters multiple times this week. Perhaps he's using CNN's new hologram technology?
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By Owen ThomasComment by insidefb: gideon is a master jedi. don't mess with him! more » | Other threads
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mysteries
Why is VC Jeremy Levine lying for Jimmy Wales?
Money is a commodity. What venture capitalists really bank is their reputation. And Jeremy Levine of Bessemer Venture Partners has just signaled that he's willing to cash in his reputation to protect a piddling $4 million investment. Levine is not amused by our report of how Levine got Wikipedia cofounder Jimmy Wales fired from his job as CEO of Wikia, calling it a lie. The report is accurate, Wikia insiders confirm; Levine's denial is the lie. The only mystery here: Why is Levine willing to dissemble for Wales? More »
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By Owen ThomasComment by dogcat: Great piece Owen. It sounds like Levine's made a big mistake: lying is so easy to do, but lying to try... more » | Other threads
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gideon yu
Facebook CFO's excellent Middle East adventure
Gideon Yu is flying back from Dubai today, we hear. His coworkers at Facebook are surely anxious to know what gifts he's bringing back — and we don't mean the duty-free kind. TechCrunch reports he was there on a fundraising mission. The Persian Gulf's sovereign wealth funds are swollen with petrodollars. But Yu's assignment was tough. Maintaining the $15 billion valuation Facebook obtained from Microsoft and Hong Kong investor Li Ka-Shing in the face of a declining advertising market will require a lot of Yu's demonstrated slickness. But if Yu can squeeze cash out of Bill Gates, surely he can navigate a Middle Eastern bazaar. More »
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By Owen ThomasComment by macbeach: I wonder if all of these things, not just Facebook, are reaching a saturation point. They are fun to try, but... 1 Responses | Other threads
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scribd
Startup guru Paul Graham's "greatest success" may be floundering
I've always thought Scribd, the online document-posting startup, was set up mostly so its investors had an excuse to throw parties. They may not have that excuse much longer, if FuckedStartup's report that Scribd is running out of money is accurate. At a time when any number of startups are running out of money, why fret about Scribd's bank-account balance? Because Scribd was manufactured in angel investor Paul Graham's Y Combinator startup factory. More »
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By Owen ThomasComment by Shadowlayer: @Figaro: Word, whoever buys it will get an extra serving of lawsuit from the print industry. Anyway, I feel bad for... more » | Other threads
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admob
Sequoia shows its favor
Venture capital is returning to an old formula: Doling out money for expansion to already-profitable businesses. That's why AdMob, a mobile-advertising startup, has gotten $15.7 million from Sequoia Capital. Sequoia, the backer of Apple, Cisco, Yahoo, and Google, summoned portfolio-company CEOs to an emergency meeting, warning them to cut costs and become self-sustainable. So why did AdMob get the cash? More »
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By Owen ThomasComment by kimbjo: Admob has always cooked their numbers. Maybe the VC's fell for it? more » | Other threads
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meltdowns
Who's shameless enough to go to The Lobby this year?
Silicon Valley venture capitalist David Hornik's invite-only dealmaking conference, The Lobby, takes place again next week at a plush resort in Waikoloa Village on the Big Island of Hawaii. Camp Cyprus was nothing compared to this funeral pyre of cash. Who cares that twentysomethings spent their own money to vacation with friends, and filmed an over-the-top video of their frolics? Hornik's hoedown is the ultimate marker of what-me-worry excess in an age of recession. And Valleywag has the complete list of who's going. More »
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By Owen ThomasComment by Web2PointOhShit: And they're all going off to Hawaii... Anyone seen Snakes on a Plane? Anyone know where I can buy a... 1 Responses | Other threads
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Skyrider
Sequoia shutters a startup
Some Valley investors succeed by spotting good ideas and nurturing them. Some succeed through utter ruthlessness. In that latter category lies Sequoia Capital, the investor behind Apple, Cisco, Yahoo, and Google. Skyrider, a file-sharing startup which had raised $25 million or more in venture capital, has shut down, according to VentureBeat. Startups fail all the time. But Skyrider was backed by Sequoia — and Sequoia, which zealously guards its reputation, rarely lets startups die so visibly. Skyrider was started as an ad-supported file-sharing service; its homepage suggested it was shifting into content distribution. But BitTorrent, a far better known name in file sharing, has struggled to crack that market. What's telling about Skyrider's failure: More »
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By Owen ThomasComment by It Must Be Take a Worm for a Walk Week: Skyrider is a sweet track by Purple Motion. 1 Responses | Other threads
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rumormonger
Tesla trying to raise $100 million?
Of troubled electric-car maker Tesla Motors, the shining light of Silicon Valley's nascent clean-transporation industry, commenter quistrl writes: More »
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By Owen ThomasComment by sggrf: my guess is that they don't get that much money. more » | Other threads
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meltdowns
Sequoia's two-faced fundraising
Remember Sequoia Capital, the once-boisterous Google backer which has turned gloomy of late? It turns out that Sequoia's prepare-for-the-worst message wasn't meant for everyone. In September, Sequoia raised $1.7 billion in two new funds from its limited partners, including the $929.5 million U.S. Growth Fund. It alone accounted for 11 percent of the $8.1 billion venture capitalists raised in the third quarter. But that money is going into new startups. More »
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By Owen ThomasComment by Shadowlayer: Theres no doubt that calacanis was a bad example, but "grow at all costs" is not the same that holding... more » | Other threads
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meltdowns
How to blame VCs for the crash
"Venture Capitalists: Don't blame us" is the title of an 800-word essay at The Deal. This kind of headline always has an obvious, hidden meaning: Yes, VCs are to blame. Let's skip to the end and see how they did it: More »
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By Paul BoutinComment by Mouser_UK: I think ime with Mt buffet and lay the blame squarly of the Banks lending to shit risks more » | Other threads
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quotable
There is no VC conspiracy, says VC Fred Wilson
"This is not some coordinated cynical attempt by VCs to talk down valuations or put entrepreneurs on the defensive. We are not spreading the contagion of gloom and doom. It's all about acting responsibly and making sure we all survive to fight another day. Because in the end, survival is what darwinian capitalism is all about." — Union Square Ventures partner Fred Wilson, on Sequoia Capital's conveniently timed warning of bad times ahead.
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By Owen ThomasComment by TheRealTruth: So the sad reality is that these VC that are telling their portfolio companies to conserve cash, should have been... 4 Responses | Other threads
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meltdowns
Sequoia's complete gloom-and-doom presentation
Silicon Valley is obsessed with a presentation by Sequoia Capital, the backer of Google, titled "R.I.P. Good Times". The venture capital firm's partners delivered it to its portfolio companies at a special meeting, predicting a long, painful recovery and advocating immediate cost cuts. We'd gotten notes from an attendee, but VentureBeat got its hands on the actual PowerPoint deck: More »
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By Owen ThomasComment by david: Ladies and gentlemen, in slide 6: the blue line is the bull and the bear is the black, and each... 1 Responses | Other threads
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meltdowns
The long march
"Slash expenses, cut deep and keep marching. You can't be a general if you turn back." — Sequoia Capital partner Eric Upin at a mandatory all-CEO meeting on Thursday. For you, just remember that creep in the corner office isn't happy as your CEO. He wants to be a general. -
Entellium
How deep did Entellium's fraud go?
$50 million of venture capital down the drain. A fraudulent set of books, going back to 2004. How did this happen? Entellium, a Seattle-based software company, saw CEO Paul Johnston and CFO Parrish Jones resign, days before the two were charged with wire fraud. What no one has explained: How on earth were the two executives able to get away with overstating the company's revenues to investors by a factor of four? More »
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By Owen ThomasComment by ShwetaAntlion: I have no idea what Entellium was supposed to be doing. It does seem strange that each and everyone of... more » | Other threads
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lehman brothers
Venture capital from beyond the grave
Lehman Brothers was one of the investors who put $12 million into MyShape, an online clothing store. Lehman Brothers, the bankrupt investment bank? Yes; its VC arm, Lehman Brothers Venture Partners, had committed to the investment in August, before its parent company collapsed. The venture group, which had raised $1.1 billion and invested $717 million of that, is negotiating to spin out of Lehman as an independent firm.
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By Owen ThomasComment by avenuen: Here's a huge one they all missed.... The dramatic change that swept through all of North America's boardrooms over the... more » | Other threads
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Entellium
Software startup's ex-execs charged with defrauding VCs
Here's an inventive business model: When you're not actually making money, try making it up. The former CEO and CFO of Entellium, a software startup in Seattle, have been charged with wire fraud after an employee found the company keeping a cooked set of books for its investors. Paul Johnston, the CEO, and Parrish Jones, the CFO, resigned abruptly last month. 40 of the company's 60 employees in Seattle were laid off, having been told that the "money ran out." Or ran away: Authorities are trying to find where the company's $50 million in venture capital went. More »
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By Owen ThomasComment by trevo: Interesting... apparently their folks over in Malaysia were already making a fuss about the shenanigans at Entellium a full month... more » | Other threads
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meltdowns
Sequoia calls off the boom
The good times are over, the partners of Sequoia Capital are telling the entrepreneurs they fund. Quite literally: They sent a summons to a summit meeting with a picture of a gravestone with the writing "R.I.P. Good Times," rival venture capitalist Om Malik reports. There, partners including Michael Moritz and Doug Leone told CEOs of companies in their portfolio that they should steel themselves for a prolonged downturn, make their businesses self-sustainable, and cut all unnecessary costs. More » -
startups
The fire sales to come
Silicon Valley has its own portfolio of toxic investments that no one likes to talk about. The office parks along 101 are littered with the living dead, startups running on fumes of hope and trickles of venture capital. What their future looks like: The $5 million asset sale of Radiance Technologies, a digital-video file-delivery company, to Comcast. An asset sale means that the buyer gets the technology, patents, and servers, while investors are left with the liabilities. Radiance's VCs, who sank $26 million into the company starting in 2000, are unlikely to see much from the purchase. Play that scenario out hundreds of times, and you get a glimpse at what's coming for investors and entrepreneurs. No wonder even sunnily optimistic VCs are losing hope. More »
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By Owen ThomasComment by eze: are those undertones of encouragement and sympathy i detect, owen? 2 Responses | Other threads
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blogging for dollars
Om Malik Arrington-proofs his blogs with $4.5 million funding
The founder of the GigaOm blog network isn't one of those guys who just wants to write, write, write. Om Malik, who reported on Valley VCs for Red Herring and Forbes in the '90s, is now on his second stint as a venture capitalist. His announcement this morning of a $4.5 million round of investment led by Palo Alto-based Alloy Ventures isn't aimed at readers, but at competing blog businessmen — specifically TechCrunch owner Mike Arrington. Malik's message: Kiss your dreams of owning me goodbye. More »
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By Paul BoutinComment by scoobydoo: I like Om. He is everything Arrington wants to be when he grows up. 1 Responses | Other threads
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venture capital
Superinvestor Ron Conway suffers confidence crisis
Venture capitalists' "confidence" is at its lowest level since the University of San Francisco began a survey of startup investors in 2004. Sharing the pessimism, angel investor Ron Conway told Silicon Alley Insider that, given current economic conditions, wantrepreneurs should "keep their day job." If they can't find enough funding to get a year's worth of cash in the bank " then they’re not meant to start that company right now," says Conway. "If you can’t raise more money, you have to cut costs. And that’s what I’m harping on to my companies." Wait a second — in what economic situation would this not be good advice? (Photo by Joi)
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Comment by Tiki Tonga: Shadowlayer - exactly. Some of the best opportunities are created during these times. People won't stopping using... more » | Other threads
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great moments in pr
I knew Q4 would be tough, but this is ridiculous
"Gigya announces $11 funding round," says one of the better typos in this morning's inbox. But seriously, closing $11 million this week? I'd be excited, too.
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By Paul BoutinComment by ScalaWag: Ahem. There is a difference between "closed" and "announced". They could have banked the money months ago, but announcing the deal... more » | Other threads
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venture capital
Bezos and Benioff buy into ZocDoc
Amazon.com founder Jeff Bezos and Salesforce.com founder Marc Benioff invested around $3 million in ZocDoc, a service for making medical appointments on the Web. Their money joins Sun Microsystems cofounder Vinod Khosla's, who led ZocDoc's $3 million first round. "We're looking for wealthy individuals to invest and not just institutional money," ZocDoc CEO Cyrus Massoumi said. How nice to be choosey. [SAI] -
deathwatch
Sneaky ad startup Jellycloud deflates, taking $50 million-plus with it
The online-ad network market is clogged with startups; most are bound to fail. But no death may be greeted with more joy than Jellycloud, the latest incarnation of Gator, a startup whose software was caught spying on users. A tipster tells us Jellycloud, with 36 employees, went under this weekend, with liquidators repossessing their furniture. A hard death, after a questionable birth. More »
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By Owen ThomasComment by MelodyLeda: Amazing that exec team was able to get funded, especially as they got rid of all the people that knew/did... more » | Other threads
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meltdowns
Silicon Valley afraid to ask "Where's my bailout?"
The Wall Street bailout act failed to pass. One imagines the well-padded VCs of Sand Hill Road smirking: "How sad!" Congress will surely have another go, with more lobbyist-written provisions and earmarks to grease the wheels. It all seems so far away from Silicon Valley, the mostly debt-free innovation machine. But if investors here had any sense, they'd be padding the halls of the Capitol, palms out. More » -
caption contest
Reduced emissions from electric car offset by VCs' unwillingness to carpool
Of the handful of Tesla Roadster coupes on America's byways, guess where you can find two parked side by side? At the office of Tesla Motors investor Draper Fisher Jurvetson on Sand Hill Road. They even have matching paint jobs! Mock away your envy in the comments — best effort becomes the new title. Yesterday's winner was UTnick with "This banner printed in Mexico." (Photo by Steve Jurvetson)
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By Jackson WestComment by ThatKid: Reduced emissions from electric car offset by VCs' unwillingness to carpool. 1 Responses | Other threads
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meltdowns
Vinod Khosla explains Wall Street crisis
Confused by Wall Street? Join the club. Vinod Khosla, a venture capitalist who is one of Silicon Valley's most revered brains, doesn't get what's happening, either. "If I can't understand it, I suspect a lot of people can't," he told Beet.tv's Andy Plesser in this video interview. "In the name of economic efficiency by slicing and dicing risk, we're reducing transparency, which is not a healthy thing." I was with him that far. But then he concluded: "Venture capital will be a pretty good place when we return to reality and invest in things we understand and are real." That rules out most Web startup investments made in the past couple of years. Heck, Khosla believes in cost-effective ethanol.
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By Owen ThomasComment by HughHaedjinn: Gosh. Who'd have thought that it would be difficult to accurately price derivatives of a new class of inherently risky... more » | Other threads
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meltdowns
The fake crisis that's killing startups
Ever heard of Uber.com? Join the club. But the Los Angeles-based social networking startup now says it's a victim of "the crisis in the economy." Investors like Discovery Communications and Universal Music Group, which sunk up to $7.6 million in the social network-turned-publishing platform, want what's left of their money back. Discovery's investment came just last May, with the company looking to use the site for its Miami Ink and LA Ink shows on TLC. But was it really the economic meltdown, or just investors coming to their senses? More »
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By Jackson WestComment by Shadowlayer: "Artist and designer Glenn Kaino originally envisioned the site as a social network for jetset hipsters" Full of FAIL! I tell... 2 Responses | Other threads
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crime
Venture capitalist charged in hit-and-run
Timothy Biro, managing partner at Cleveland's Ohio Innovation Fund, is facing vehicular homicide charges after running over bicyclist Terrell Jones who later died at a Cleveland hospital Wednesday night. When police stopped Biro and informed him of the accident, Biro told officers he thought he'd hit a pothole. Biro is being held in jail while awaiting a court appearance this morning. [Cleveland Plain Dealer]
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By Jackson WestComment by sinical: Ohio does have some serious potholes. Its an honest mistake. more » | Other threads
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jackpot
Did Kevin Rose cash out?
The whispers have started: How much money did Kevin Rose make personally by selling shares in Digg's latest round of VC funding? The talk that Rose has sold shares is driven by equal parts envy and admiration. To understand the reaction, it helps to realize that the notion of an entrepreneur selling his own shares directly to investors before a public offering — getting out of the company just as other investors were getting in — used to be taboo in Silicon Valley. But that was before Wall Street's IPO machine broke down, and before merger activity dried up. Rose is at the vanguard of a seismic shift in how the Valley pays off its entrepreneurs. More » -
burn rate
Digg announces major increase in spending
Burn, baby, burn! That's the coded message in Digg CEO Jay Adelson's blog post about a "major expansion effort." The website, whose users rate and discuss news headlines, is hiring for 19 open positions, with more to come, as Digg expands internationally. Only at the end does Adelson mention how he's making this happen: $28.7 million in venture-capital financing. Coming after failed acquisition talks with Google, the financing round makes it clear that Digg is now planning to get bigger rather than sell out. It's a strange thing to celebrate. More »
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By Owen ThomasComment by Figaro: This new money will increase the Digg's acquisition price by at least 40-50% which would put Digg in $300M range.... 2 Responses | Other threads
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