Two months ago, readers of Philadelphia Magazine were treated to an extraordinary tale of covert military missions and technology investing. It was about Mike Burns, co-founding managing director of Guggenheim Ventures. Here’s the lead:
The most successful Philadelphia entrepreneur no one has ever heard of wants to go off the record. Mike Burns, described by one friend as having an altar-boy face and an assassin’s heart, is in his understated King of Prussia office, from which he runs Guggenheim Venture Partners — the “deep tech” venture firm he founded with asset manager Guggenheim Partners, of the philanthropic New York family best known for a museum. Burns, who is all of 37 but looks little more than half that, entered into the Guggenheim partnership after he sold his first two companies for $750 million, one of those companies being Traffic.com.
The problem? I’ve asked about the Lidocaine patch Burns is wearing on a particular body part. When he’s not making millions, the former naval officer is a reservist in Special Operations Forces, a volunteer troop of special-mission commandos. Burns doesn’t talk about what he does as a reservist, but it presumably involves some Bond-like stuff. Last week he returned from his last deployment, likely an exotic place, and he injured said body part — a particularly vulnerable spot, given that he’d injured it before doing something else that was dangerous and secretive. “This has to be off the record,” he reiterates. “I don’t want the enemy knowing any weakness.”
The piece carried on for several pages, including a Photoshopped image of Burns holding a gun in one hand and a briefcase in the other. Fascinating stuff. Well, if it were true.
Burns is currently a reserve officer in the U.S. Navy, and at one point did indeed serve in the reserve unit at U.S. Special Operations Command. But that last part ended back in April 2009, according to Naval public affairs officer Brenda Malone. As for the Lidocaine patch, it was from a small cut into the muscle, which Burns did not receive while on military assignment.
There are a bunch of other misleading items in the story, which Burns and Guggenheim apparently hoped would simply highlight the team’s unusual mix of tech geeks and former military pros (including Dave Jannetta, the former mayor of Altoona, PA who is a retired lieutenant colonel in the U.S. Air Force). There also is no mention of how much trouble GVP had raising its debut fund, or that one of the three founding partners is long gone. And then there is the case of a GVP staffer apparently missing the point of a peHUB Wire item, which the writer retells as a stroke of research and investment savvy.
Now here’s where it gets even a bit more interesting: That writer was Larry Platt, who also happened to be editor of Philadelphia magazine. Just a few weeks after the June issue was released, Platt was fired. Here’s how Philly.com described the situation:
Sources tell us the decision was largely due to Platt’s history of inappropriate and unprofessional remarks and jokes to his employees, in what closely resembled the behavior of the fictional “The Office” boss Michael Scott.
Apparently the final straw was Platt’s decision to give a framed photo of a removed testicular cyst to a departing female editor. Classy.
Sometime soon after, Philadelphia Magazine removed the Burns story from its website and website archives. In fact, the only way to find it online is via Google cache. I asked interim editor Tom McGrath if the removal was due to inaccuracies, and sounded surprised. Instead, he said: “We discussed the situation with people in law enforcement, who felt the story could post a risk to Burns’ family.” He added that if I had information that part of the story – which “underwent our regular fact-checking” – was incorrect, he’d like to know about it.
To be kind, McGrath was being disingenuous. Both Burns and his attorneys had already contacted Philadelphia magazine by that point, which McGrath acknowledged during a subsequent phone call with me last Thursday. But he still maintained the “family risk” rationale for pulling the story (saying Burns himself raised the issue), at which point I asked why he didn’t also have unsold copies removed from bookstores and newsstands. No response.
Burns declined to speak with me about the situation – methinks at Guggenheim’s urging — which means there still is no explanation for some of the quotes which seem to have led Platt to his ridiculous conclusions. Platt also didn’t return a message helft on his home answering machine.
Burns did pass me onto his attorney Dick Sprague, who said via email: “The Philadelphia Magazine article was written tongue-in-cheek. As such, no further comment is warranted and none will be given.”
Really Dick? Then why were you involved in the first place? Oh right, because the tongue-in-cheek parts were based on a false premise that has caused your client harm (at least in the eyes of multiple Philly-area VCs and techies – including some of Burns’ former colleagues — who originally alerted me to the story).
Really just a bizarre situation, and not one that does much to advance the cause of Guggenheim Venture Partners. The firm is more than halfway through deploying its debut fund, which means it will return to market within the next 12 months. There is an interesting story to tell. Just not the one that has already been told.
The Blackstone Group reportedly is in talks to buy Polymer Group, a maker of non-woven materials, from MatlinPatterson. Blackstone also is acting as MatlinPatteron’s advisor on the sale.
Nanosys Inc., a Palo Alto, Calif.-based advanced materials company, has raised $15 million from the VC arm of Samsung Electronics, as part of a larger strategic partnership. The company also raised another $10 million from existing shareholders Arch Venture Partners, El Dorado Ventures, Polaris Venture Capital and Venrock. Nanosys previously raised around $94 million since 2001.
Aegerion Pharmaceuticals Inc., a Bridgewater, N.J.-based drugdeveloper focused on cardiovascular and metabolic diseases, hasre-filed for an $86.25 million IPO. This the the company’s third IPO filing, having twice before filed and withdrawn due to “market conditions.” Leerink Swan and Lazard Capital Markets are serving as co-lead underwriters. Aegerion has raisedover $44 million in total VC funding, from firms like Index Ventures, Advent International, Alta Partners, Scheer & Co. and MVM Life Science Partners. www.aegerion.com
TetraLogic Pharmaceuticals, a Malvern, Penn.-based developer of small molecule drugs to treat cancer, has raised $32 million in Series C funding. Clarus Ventures led the round, and was joined by Hatteras Venture Partners and return backers Amgen Ventures, HealthCare Ventures, Latterell Venture Partners, Novitas Capital, Quaker BioVentures and the Vertical Group.
Dicerna Pharmaceuticals Inc., a Cambridge, Mass.-basedRNA interference company, has raised $25 million in Series B funding. Domain Associatesled the round, and was joined by return backers Oxford Bioscience Partners,Abingworth Management and Skyline Ventures. The company previously raised $21.4 million.
G5, a Bend, Ore.-based provider of vertical-specific local marketing solutions, has raised $15 million in first-round funding led by Volition Capital.
Talari Networks Inc., a San Jose, Calif.-based developer of adaptive private networking technology, has raised $10 million in Series B funding. Silver Creek Ventures led the round, and was joined by return backer Menlo Ventures The company previously raised $6.2 million.
Ciespace Corp., a Pittsburgh-based developer of a 3D digital modeling platform, has raised $4 million in Series A funding co-led byArch Venture Partners and The University of Tokyo-Edge Capital.
TransFS, a Chicago-based comparison shopping site for credit card processors, has raised $510,000 in seed funding from Hyde Park Angels and 500Startups. www.transfs.com
Aurora Capital Group has acquired a majority stake in Lexington Precision Corp., a New York-based maker of tight-tolerance rubber components. No financial terms were disclosed. Lexington emerged from Chapter 11 bankruptcy protection at the end of last month.
Avenue Capital Group and Oaktree Capital Management have agreed to acquire the assets of Sea Island Acquisition, a bankrupt private resort and real estate development company. No financial terms were disclosed.
Nestor Healthcare (LSE: NSR) has rejected an unsolicited £101.6 million buyout approach from Acromas Holdings, a portfolio company of CVC Capital Partners, Charterhouse Capital Partners and Permira.
Tribal Holdings PLC (LSE: TRBG), a British public services outsourcing firm, has received buyout interest from an undisclosed party. The company’s stock rose 20% on the news.
SunTx Capital Partners has acquired a majority stake in Carolina Beer & Beverage, a Mooresville, N.C.-based contract beverage manufacturer. No financial terms were disclosed.
China Kanghui Holdings, a Chinese maker of orthopedic implants, raised around $68.4 million in its IPO. The company priced nearly 6.68 million American depository shares at $10.25 per share ($9.25-$11.25 range). It will trade on the NYSE under ticker symbol KH, while Morgan Stanley and Piper Jaffray serving as co-lead underwriters. Shareholders include IDG-Accel (21.5% pre-IPO stake), SIG China Investments (18.4%), TDF Capital (12.4%) and CDH Venture Capital (9%).
MediaMind Technologies Inc. (f.k.a. Eyeblaster), a New York-based provider of digital marketing services and technology, raised around $57.5 million in its IPO. The company priced 5 million shares at $11.50 per share, compared to a $14-$16 per share offering range. It will trade on the Nasdaq under ticker symbol MDMD, while J.P. Morgan and Deutsche Bank served as co-lead underwriters. MediaMind raised around $38 million in VC funding. Shareholders include Sycamore Technology Ventures (33.9% pre-IPO stake), Insight Venture Partners (22.6%) and Eli Barkat (managing director of BRM Capital).
OptiMedica Inc., a Santa Clara, Calif.-based ophthalmic device company, has agreed to sell its retina and glaucoma assets to Topcon Corp. No financial terms were disclosed. OptiMedica has raised nearly $52 million in VC funding from DAG Ventures, Kleiner Perkins Caufield & Byers and Alloy Ventures.
Norvestor Equity has agreed to sell Secode AB, a provider of managed security and security consulting services, to NTT Communications Corp., a unit of Nippon Telephone and Telegraph Corp. No financial terms were disclosed.
Jennifer Kwon has joined The Gores Group as vice president of investor relations. She previously served in a similar role at Sterling Partners.