Marc Poirier last week sent out an email announcing that he had left @Ventures, after a dozen years as a general partner. The tech/finance blogosphere didn’t pay attention, which goes to show how far removed we are from the dotcom boom (as if we really needed another reminder).
Ten years ago, @Ventures was one of the most active and (theoreticaly) most well-capitalized VC firms in the world. Shortly after I began covering the market, it boasted three $1 billion funds — although company executives would later try walking those numbers back as parent company CMGI’s stock price plunged.
@Ventures has since morphed into a sleepy cleantech investment firm, and Poirier’s departure leaves just one remaining team member from the good ole’ days — managing partner Pete Mills. But it got me to wondering about what happened to all those other folks, so I put together a Where Are They Now. Get it h! ere.
*** Two minutes of Nate Robinson is two minutes too many of Nate Robinson.
*** Flipping through the regulatory filings yesterday, and spotted one for ModCloth – an innovative online retailer that previously had raised a few million dollars from First Round Capital, Mike Maples and lots of individual angels. Looked huge by comparison — $19.82m called of a $32.62m offer – so figured it was worth a closer look.
Turns out the deal is effectively a recap, in which new investors bought Series B stock and the company bought back Series A and Series A-1 shares from many of the smaller angels. No official word on the lead, but rumor is that it’s a big Silicon Valley firm whose name sounds like —- Fole y or — Rose.
ModCloth co-founder and CEO Eric Koger declined to discuss new investors or financial breakdowns, but did say that the new money will be used to help the company expand. Pittsburgh-based ModCloth launched four years ago to sell women’s indie, vintage and retro clothing. Rather than a top-down approach, it uses social media to suggest and vote on what types of clothing it should sell.
“ModCloth is much bigger than it appears at first glance,” Koger explains. “The real concept is community-oriented e-retail, in which we help tie specific consumer communities into designer communities.”
He says that the initial “ModCloth” niche is viewed as the company’s pilot, with future plans to launch such channels as “dimension” (petite/plus-si! ze), age (teens, 30-somethings) and aesthetic (“social party girl to conservative professional”).
Expect more news from ModCloth within the next couple of weeks.
*** The Homeowner Analogy: Gerry Langeler, a managing director of OVP Venture Partners, has garnered attention this week for a NYT op-ed and CNBC appearance arguing against proposed changes to carried interest tax law. The heart of his argument is the following analogy:
“We in the industry invest a small percentage of the total dollars in our partnerships, like the house purchase, with our limited partners investing the rest. Our investments are locked up for prolonged periods of time, often five to 10 years before we see any return. There is a real, material risk of loss of capital. In fact, many venture funds in the bubble lost money, including partners’ capital. Like the house situation, our downside loss potential is ‘fixed’ by what we invested, while our upside is unbounded.”
In short: GP=Homeowner and LP=Bank.
I emailed – and tweeted – my primary objection to this comparison. After all, since when have mortgage lenders paid homeowners an annual fee?
Langeler replied via email. Here’s the most relevant portion:
“If I go to the lender and get them to agree to lower their interest rate in exchange for a piece of the upside on the house, that does not change the capital gains treatment. If I get them to eliminate the interest rate in return for a larger piece of the upside, my piece of the upside is still a capital gain. If I get them to pay me regular income to manage the house (that I essentially borrow from them, but have to pay back) but give them an even larger piece of the upside, it’s still a long term capital gain for both of us.”
I’ve got some more thoughts on this, but would like to hear yours first…
Top Three
SunEdison, the solar energy unit of MEMC Electronic Materials Inc. (NYSE: WFR), has agreed to a joint venture with energy-focused private equity firm First Reserve Corp. The deal could result in First Reserve acquiringup to $1.5 billion in current and future SunEdison solar photovoltaic energy projects.
Clovis Oncology has signed a development and commercialization agreement for Avila Therapeutics’ epidermal growth factor receptor (EGFR) mutant-selective inhibitor (EMSI) program, which is in pre-clinical development for the treatment of non-small cell lung cancer. Avila will receive up to $209 million in up-front and clinical milestone payments, plus possible royalty and sub-licensing fees. Clovis Oncology last year raised $146 million in Series A funding, while Avila Therapeutics has raised over $51 million.
Tony Blair, the former British prime minister, has joined Khosla Ventures as a senior advisor. He will focus on Khosla’s cleantech portfolio.
VC Deals
T2 Biosystems Inc., a Cambridge, Mass.-based developer of portable medical diagnostic products that combine nanotech and miniaturized magnetic resonance technology, has raised $15 million in Series C funding. Physic Ventures led the round, and was joined by Arcus Ventures, RA Capital, Camros Capital, WS Investments and return backers Flagship Ventures, Polaris Venture Partners, Flybridge Capital Partners and Partners Healthcare. The company previously raised just over $21 million.
Gaikai Inc., a provider of a cloud-based video game streaming service, has raised more than $10 million in Series B funding. TriplePoint Capital, Rustic Canyon Partners and an undisclosed strategic backer were joined by existing shareholder Benchmark Capital.
Delphinus Medical Technologies LLC,! a Detroit-based developer of an alternative to mammography, has raised $8 million in VC funding. Arboretum Ventures and Beringea co-led the round, and were joined by North Coast Technology Investors. Delphinus Medical is a spinout from The Barbara Ann Karmanos Cancer Institute.
Swaptree.com, a Boston-based operator of an online swap-meet, has raised $6 million in VC funding led by Safeguard Scientifics. The company also named Jeff Bennett, former president and COO of NameMedia, as its new CEO.
Bioformix, a Blue Ash, Ohio-based developer of sustainable adhesives a nd plastic alternatives, has raised $1.05 million in VC funding from CincyTech and Queen City Angels.
Off & Away, a Seattle-based auction site where travelers bid for luxurious accommodations and related goods, said that it has raised an undisclosed amount of Series A funding from Madrona Venture Group.
Vinfolio Inc., a San Francisco-based online wine marketplace, has raised an undisclosed amount of VC funding from Steve Case’s Revolution LLC. It previously raised $4.5 million in Series A funding led by Panorama Capital.
Buyouts Deals
The Blackstone Group has entered the bidding for Australian hospital operator Healthscope (AX: HSP), by partnering with The Carlyle Group and TPG Capital on their $1.5 billion offer.
DLJ South American Partners has led the acquisition of a 25% stake in Grupo Santillana de Ediciones SL, a provider of educational book publishing for the Latin American market, from Grupo Prisa. The deal was valued at $370 million. Other participants included Gavea Investimentos, Highbridge Mezzanine Partners, Magna Capital, Stichting Pensioenfonds Zorg en Welzijin and DLJSAP limited partners like Albright Capital Management, Honeywell Capital Management, Partners Group and PCGI.
Hampton Road Bankshares Inc. (Nasdaq: HMPR) has agreed to raise $255 millio! n via a private placement. Purchasers would include The Carlyle Group and Anchorage Advisors, which each would pay around $73 million for a 23.1% voting rights position.
Gloucester Engineering Co., a Gloucester, Mass.-based provider of system and component solutions to the plastics extrusion and converting market, has secured a credit facility from an affiliate of Blue Wolf Capital Management.
Jingle Punks Music LLC has raised an undisclosed amount of private equity funding from Hammerline Capital. The New York-based company publis! hes music for use in television, film, advertising and interactive to clients across the media and entertainment industries.
Mistral Equity Partners has acquired a majority interest in LoveSac, a multi-channel retailer of bean-bag chairs and other furniture products. No financial terms were disclosed.
PE-Backed IPOs
KKR plans to help underwrite the $1.15 billion IPO of portfolio company NXP Semiconductor, according to a revised SEC filing.
PE Exits
CITG Capital Partners has sold branded merchandise distributor Evigna to Bensussen Deutsch & Associates Inc. No financial terms were disclosed. Cobblestone|Harris Williams advised Evigna on the sale.
Denham Capital has agreed to sell its equity stake in Asphalt Holdings Inc. to NuStar Energy LP (NYSE: NS). The deal is valued at $44.1 million. AHI provides receipt, storage and distribution of asphalt and crude oil via marine vessels, barges, tank trucks and rail cars.
PE-Backed M&A
Lightower Fiber Networks, a Boxborough, Mass.-based metro fiber network and bandwidth service provider, has acquired Veroxity Holdings Inc., a Bedford, Mass.-based provider of mission critical optical data networks. No financial terms were disclosed. Lightower Fiber has raised nearly $60 million from M/C Venture Partners, Pamlico Capital and Wachovia Capital Associates. Veroxity had raised money from Banc of America Capital Investors.
The Rubicon Project, a Los Angeles-based provider of an Internet advertising platform, has acquired SiteScout, a Seattle-based provider of malware security technology. No financial terms were disclosed. Rubicon Project has raised has raised $42 million in equity and debt funding, from firms like Clearstone Venture Partners, Mayfield Fund, Peacock Equity, IDG Ventures Asia and Silicon Valley Bank.
Firms & Funds
HarbourVest Partners has raised a mid-market European loan fund via a £101 million share placement to mostly UK institutional investors.
Human Resources
John Caple has joined Comvest Group as a managing director in the firm’s West Palm Beach office, according to an email recently sent out to friends and colleagues. He previously was a principal with H.I.G. Capital. www.comvest.com
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