AllThingsD » Chris Sacca

Exclusive: Backupify Closes $5 Million in Round Led by Avalon Ventures

Arik Hesseldahl — Thu, 08 Sep 2011 12:20:57 +0000

Backupify, a cloud-based service that backs up the content of several social networks — including Facebook, Twitter and LinkedIn — and also the contents of Google Apps accounts, has landed a $5 million B round of venture capital funding led by Avalon Ventures.

Prior investors General Catalyst and Lowercase Capital also joined the round, which brings the company’s total funding to $10.4 million. Avalon’s Brady Bohrmann will join Backupify’s board.

I talked with CEO Rob May, who told me about his plan to accelerate marketing and adoption of Backupify by users of Google Apps, the search giant’s Web-based business suite of applications that is proving popular with businesses. So far, Backupify is being used to back up the files on 5,000 Google Apps domains. He says he would also like to offer Backupify for several other services that users have been requesting. In addition, May wants to boost Backupify’s visibility among the many third-party partners — like, say, Cloud Sherpas — who work with businesses deploying Google Apps.

The outfit is growing fast. It has 175,000 users and stores 200 terabytes of data for its users, not just from Google apps, but also from Twitter, LinkedIn, Flickr, Blogger, and the Zoho Web-based office suite. One public customer is New York’s Museum of Modern Art, which uses Backupify to back up the Google Apps data generated by some 1,000 users. The data is all backed up to Amazon Web Services, but users can also download local copies of their data.

Why would you need to back up data that’s on a supposedly reliable cloud service? Because you might goof up — and delete something you didn’t mean to — just as easily in the cloud as on your PC. May says that roughly one-third of all data loss occurs because of user error. “We hear a lot of different things. When you delete something, Google assumes you meant to delete it. Sometimes things get deleted maliciously by a hacker, or someone who gets ahold of a password that wasn’t taken care of,” he says. “IT administrators want their own backup copy they can restore from. They trust Google not to lose it, but they don’t always trust their own users.”

Backupify’s $4.5 million A round was also led by Avalon and joined by General Catalyst and Lowercase Capital. Prior to that, First Round Capital led a $900,000 seed round, which was joined by Betaworks and several individual investors, including Chris Sacca and Jason Calacanis.

Take the Money and Run? Twitter Shareholders Now Mulling Cash-Out Offer From DST.

Kara Swisher — Wed, 31 Aug 2011 17:13:08 +0000

Whether or not to sell any of their shares in Twitter is the big decision facing stakeholders of the microblogging service right now, as the second $400 million part of the company’s recent funding by Russia’s DST Global is completed in the next several weeks.

That includes everyone from early angel investors to those who bought it on the secondary markets to Twitter’s 600 employees, all of whom can sell a portion — up to 20 percent, sources said — of their holdings.

It’s all part of a recent $800 million mega-funding by Twitter, valuing the San Francisco company at $8.4 billion.

While $400 million went to Twitter, the second tranche of $400 million of the total was targeted to cash out current investors and also employees of the company.

Current investors include Benchmark Capital, Union Square Ventures, Spark Capital and several other venture firms, as well as a spate of prominent angel investors, such as Ron Conway.

Whether DST — as well as other smaller buyers, including early Twitter investor Chris Sacca and T. Rowe Price, according to the tender offer — gets them and others to sell enough shares is the big question, especially since few want to get caught in what one shareholder called the “Facebook idiot box.”

That would be referring to those who sold their investments in Facebook two years ago, when the social networking giant allowed its employees to sell 20 percent of their stakes to DST.

The financing was part of a $100 million add-on to a $200 million investment in the social networking company by the aggressive Russian investor.

At the time, the tender offer valued Facebook at $6.5 billion for the common stock, or $14.77 a share.

Of course, Facebook is worth upward of more than 10 times that now. Oops!

That’s why high-profile Silicon Valley venture firm Andreessen Horowitz, for example, is not selling out any of the shares it bought earlier this year in an $80 million transaction in private secondary markets.

Reasons to sell, of course, are also compelling.

Some investors might want to lock in upside, especially if they think the latest valuation is too high.

For venture capitalists in the company, some might want to return a win to their limited partners, while Twitter employees might want to put a down payment on a house after years of toiling in the start-up.

Others might also be worried about Twitter’s prospects going forward and might determine that the recent round was the high point of its market value. Twitter has indeed struggled to find a sustainable and lucrative business model, focused on advertising.

In addition, although it has recently stabilized, others might worry about Twitter’s management changes over the last year, as co-founders Biz Stone and Evan Williams have departed. Twitter creator and other co-founder Jack Dorsey is now running the company’s product efforts, with CEO Dick Costolo (who looks a lot like that Woody Allen shot above from the classic movie, “Take the Money and Run”).

Then again, that was exactly the take on Facebook several years ago, so it is now a case on all sides of seller beware.

Twitter declined to comment and I have not heard back yet from DST about the status of the transaction.

Kickstarter Fesses Up: The Crowdsourced Funding Start-Up Has Funding, Too

Peter Kafka — Fri, 18 Mar 2011 01:47:02 +0000

Kickstarter has all the requisite characteristics for a hot startup: an ah-ha! concept, a growing user base, and great buzz.

The one thing it doesn’t have are stories about investors clamoring to throw money its way. And the three-year-old company has never disclosed a funding round. Is it possible it has never taken in any money?

Nope. It’s not. I hear that Kickstarter, which helps artists and entrepreneurs raise money for their projects via crowd-sourced donation, has itself raised around $10 million in venture backing so far.

Its investors are high-profile, too: Union Square Ventures is the company’s best-known backer, but Kickstarter has also received money from the Betaworks incubator/seed investment fund, along with contributions from well-known entrepreneuer/angels like Twitter co-founder Jack Dorsey, Vimeo co-founder Zach Klein and Flickr co-founder Caterina Fake.

Kickstarter’s public profile has been shooting up, up, up–most recently, as the company that helped fund watches made out of Apple’s iPod nanos — and its backers are a bit of an open secret in tech circles. But for whatever reason the company hasn’t wanted its investors chatting about it.

Union Square, for instance, doesn’t include the company in its public portfolio. [UPDATE: Now they do. "Recently the company has been getting a lot of attention and it has become clear to all of us that the quiet period is over," USV partner Fred Wilson writes in a blog post this morning. "So now we get to add the Kickstarter logo to our investments page and we can talk about the company publicly as much as we talk about it privately.]

That quiet period is over now, though, courtesy of a profile in the new issue of Wired magazine. The story is primarily about the company’s origins and ambitions, but casually mentions Union Square’s backing, and identifies Fake, Klein, Dorsey, Meetup founder Scott Heiferman and comedian David Cross (!) as other investors.

I asked CEO Perry Chen for more details about the company’s funding, but didn’t expect much. And via a pr agency, I ended up with a list of other angels, but nothing else. Here it is, for the record: Josh Stylman; Peter Hershberg; Joi Ito; Chris Sacca; Joshua Schacter; Matt Haughey; Josh & Jared Kushner; Chris Kaskie; “some other friends.”

The Wired issue with the Kickstarter profile is just landing in subscribers’ mailboxes now, and should be on newsstands and iPads next week. If you’re waiting for a free peek, though, you’ll have to be patient–the magazine usually waits a bit before it puts a new issue up on the Web. Meantime, here’s a look at the cover, via the magazine’s Twitter account:

[Kickstarter image credit: Scott Beale / Laughing Squid]

1000Memories Funded by Greylock, Angels

Liz Gannes — Wed, 16 Feb 2011 12:00:49 +0000

1000Memories, the social media site for friends and family to memorialize loved ones who’ve passed away, is disclosing today it has raised $3 million worth of funding, including a Series A round led by Greylock Partners.

The money was actually raised last fall in two rounds after the company completed the Y Combinator program, but for whatever reason it’s been kept under wraps. NetworkEffect took the opportunity to talk with co-founder Rudy Adler about his year-old start-up this week.

“The Internet was missing a past tense,” is Adler’s quip to explain the motivation for 1000Memories. The site offers a central place for mourners to contribute pictures, stories and the like, with the promise of becoming a permanent collaborative obituary and eulogy.

Sites like Facebook don’t have a great way of dealing with people who pass away, because they are designed for living participants, Adler said. Creating accounts for dead people can be awkward, but perhaps less so on a dedicated, nicely designed site.

Future premium products for 1000Memories may include custom domains, physical memory books, personalized designs and additional storage, Adler said. The company currently helps its users do things like rip and post DVDs, in part because they are often much older and less tech savvy than the average social media user.

1000Memories recently launched a groups feature that was used to memorialize those killed in the Egyptian protests. It went viral, with more than 400,000 page views, Adler said.

In addition to Greylock, participants in the $2.5 million Series A round included Caterina Fake, Ron Conway, Keith Rabois, Mike Maples, Paul Buchheit and Chris Sacca. It came through just a couple of months after 1000Memories had raised an angel round worth $500,000.

Instagram Raises $7M Led by Benchmark

Liz Gannes — Wed, 02 Feb 2011 17:08:22 +0000

The photo-sharing start-up Instagram this morning announced it has closed a $7 million first-round funding led by Benchmark Capital’s Matt Cohler and including Quora founder Adam D’Angelo, Twitter and Square founder Jack Dorsey, and angel investors Chris Sacca of Lowercase Capital and Steve Anderson of Baseline Ventures.

Instagram, which is available only for the iPhone, has grown quickly from its launch in October, and now has 1.75 million users and 290,000 photos posted per day. The company thinks of itself as a sort of personal digital magazine, and will likely monetize through sponsored accounts and advertising from brands that fold in with its community’s stream of pictures.

Instagram co-founder and CEO Kevin Systrom was a former Google and Nextstop product manager who also interned at Twitter predecessor Odeo. His San Francisco-based company has a team of just four people.

Instagram is in a class of peers who seized on similar concepts (smartphone-enabled media-sharing communities) at similar times. Picplz was first to take its Series A, with $5 million led by Andreessen Horowitz (there was some drama because that firm had also invested in Instagram early on). Path yesterday raised $8.65 million led by Kleiner Perkins and Index Ventures. Now for the hard part: Building real companies.

"Super Angel" Aydin Senkut Talks About VCs, Start-Ups and Shaking Up Tech Investing

Kara Swisher — Mon, 23 Aug 2010 14:11:12 +0000

While in Vancouver last week, BoomTown got some time to chat with Aydin Senkut about his recent announcement of a new $40 million investment fund, which is part of a “super angel” trend in Silicon Valley.

In many ways, the concept of a super angel was pioneered by well-known tech investor Ron Conway, whom Senkut mentions in the video interview I did with him, below.

But now the market is getting very crowded, with a $30 million fund being raised by Dave McClure just one of many similar efforts by others, from Chris Sacca to Michael Dearing to Conway himself, again.

Apparently, according to a recent report in The Wall Street Journal, these super angels have some kind of mysterioso “magnetic” effort–which means entrepreneurs like them and other investors pay mind.

Also, they compete with VCs, which–IMHO–simply means more VCs of different shapes and sizes. Oh joy!

In all seriousness, via Felicis Ventures, Senkut has been a serious regular-size angel investor for many years, since he left a post at Google (GOOG), with wins that include Mint, which sold to Intuit (INTU), and the Google-acquired Aardvark.

Here’s my chat with Senkut, which touches on all these topics and more:

[ See post to watch video ]

Novelty? Sure. Business? Could Be! Stickybits Raises Another $1.6 Million.

Peter Kafka — Wed, 19 May 2010 13:05:55 +0000

Stickybits is the kind of thing that might make more sense if you’re not entirely sober: It’s a funky, practical-joke-from-the-future concept that involves stickers, scannable bar codes and geo-tagging.

It might also be a business. That’s the hope of investors who have just plowed $1.6 million into the six-man operation, which launched a few months ago.

First Round Capital and Lower Case Capital are putting new money into the company, along with existing investors Mitch Kapor and Polaris Venture Partners, who previously invested $300,000. Stickybits is also touting the arrival of semi-celebrity angel investor Chris Sacca.

Again, explaining Stickybits takes a bit of work, and it may be easier if you’re drinking beer instead of coffee. Time.com did a fairly concise job, though: Using an Apple (AAPL) iPhone or Google (GOOG) Android, “users can scan barcodes, attach a piece of information–either a video, note or audio recording–and receive a notification whenever someone else scans the same object. Stickybits also produces unique, one-off barcodes of its own that, when attached to a postcard, for example, add digital memory to static objects.”

So that sort of sounds fun, and there might even be some commercial applications: You can see how marketers might want to play around with tagging the bar codes on the stuff they sell, etc.

Founder Billy Chasen, a graduate of the Betaworks start-up incubator, says the company intends to court those commercial customers, via privileged access to its API, as well as a dashboard they could use to manage their bar codes.

But Chasen says his company won’t be consumed with consumer marketers. “It’s not going to turn into something where it’s just a tool for brands,” he says. “We want it to be fun.”

Cool! In the meantime, Stickybits is generating a couple dollars by selling those personalized barcode stickers. I bet someone has already slapped one on a bong.

Accel Keeps Its Wallet Open: Lookout Grabs $11 Million in Funding and Adds Execs

Kara Swisher — Tue, 18 May 2010 11:00:50 +0000

Accel Partners has been pretty busy handing over giant wads of dough to start-ups this week–and today is focusing its largess on San Francisco-based Lookout, a smartphone security provider.

The Palo Alto, Calif.-based venture firm will be the lead investor in an $11 million Series B funding round for Lookout, which offers solutions to protect phones from malware and viruses, back up and restore valuable data and help users find their phones in the event they are lost or stolen.

Accel Partner Ping Li will join the start-up’s board.

Lookout currently works only on phones using Google (GOOG) Android, Research in Motion (RIMM) BlackBerry and Microsoft (MSFT) Windows Mobile operating systems.

Previous venture investors Khosla Ventures and Trilogy Partnership are also participating. The pair, along with angel investors such as Chris Sacca, had already put $5.5 million into Lookout late last year. The company was founded as Flexilis in 2007.

Lookout said the former CEO of Vontu and executive at Symantec (SYMC), Joseph Ansanelli, would become chairman of Lookout and that it had brought in other execs, including a former Yahoo (YHOO) staffer. Ansanelli has been an angel investor in Lookout.

Here’s the official press release:

Lookout Closes $11 Million in Series B Funding Led by Accel Partners

Explosive Growth in Smartphone Market Underscores Need for Mobile Security

SAN FRANCISCO–May 18, 2010–Lookout, the leader in smartphone security, today announced an $11 Million Series B round of funding led by Accel Partners with Khosla Ventures and Trilogy Partnership also participating. The company also announced that it has added several new executives to its leadership team, including former CEO of Vontu and executive at Symantec, Joseph Ansanelli, as Chairman of the Board.

“The smartphone market is exploding, and consumers are downloading third-party apps by the hundreds, making security an increasingly vital component of the mobile market,” said Ping Li, Partner at Accel Partners, who will join the board. “Consumers need to know that their applications, their data, and their phone itself are protected. We are excited to work with Lookout as they continue to extend their lead in this dynamic market.”

The global smartphone market grew more than 50% during the past year and as a result, consumers have been introduced to thousands of third-party applications across leading mobile platforms through app stores and downloaded sites. The Android Marketplace alone gives consumers access to more than 50,000 applications. While they enjoy the benefits of these applications, consumers are often unaware of the risks that accompany their increased data and application usage. Similar to the PC market, as consumers do more with their phones, they need protection from threats such as mobile viruses and malware, data loss and theft of the phone itself.

Lookout has developed cross-platform, cloud-connected applications that immediately identify and block threats before they compromise a consumer’s mobile phone, backup and restore mobile content, find a lost or stolen phone and wipe data from a phone if necessary. Available now on more than 400 mobile networks in 170 countries, Lookout prevents thousands of malicious applications, finds countless lost phones and restores important information for users every month.

“We are thrilled to receive such enthusiastic support from Accel Partners,” said John Hering, CEO and founder of Lookout. “Their backing is recognition of Lookout’s accomplishments to date and a testament to the importance of this market. With this additional financing, we’ll continue to invest in new technology and infrastructure so that we can provide the most comprehensive smartphone protection available to millions of consumers worldwide.”

Lookout Executive Additions

Joseph Ansanelli brings his extensive knowledge of security to Lookout as Chairman of the Board. Prior to Lookout, he served as CEO and co-founder of Vontu, turning the company into the leading provider of data loss prevention solutions before being acquired by Symantec in 2007.

In addition to Ansanelli, Lookout has also added several key members to the company’s executive team including Eric Bothwell as vice president of engineering, who formerly held engineering leadership positions at Vontu and Symantec; Chris Jones as vice president of product management, formerly senior director of portfolio product management at Symantec; and Julie Herendeen as vice president of marketing, formerly vice president of network products and advertising solutions for Yahoo! Inc.

Swipely Nabs $7.5 Million in Series A Funding for Social Spending (And to Attack Blippy!)

Kara Swisher — Tue, 11 May 2010 08:59:50 +0000

Oh, joy: More venture bucks for more socializing of credit card information.

Today, it is Swipely’s turn to grab the spotlight in the ever-crowded space to, as the start-up’s press release so aptly says, “turn purchases into conversations.”

Yes, it says that.

BoomTown excitedly awaits the next big thing to be intrusively socialized, such as these start-ups: Wipely (it records and shares every time you clean your bathroom), Diaply (don’t let your friends miss every diaper change!), and, of course, Hypely (every time a social category is overfunded by VCs, you get a poke).

In any case, Swipely–now in private beta, founded by Tellme co-founder Angus Davis and backed by some top venture firms and Silicon Valley angel investors–got $7.5 million in funding to try to take on sites such as Blippy.

Index Ventures is leading the latest Swipely round, which includes Greylock Partners and First Round Capital, as well as investors such as Ron Conway and Chris Sacca.

Swipely said Danny Rimer of Index Ventures will join its board of directors, and Reid Hoffman of Greylock Partners will serve as an observer.

Swipely had previously raised $1 million.

Blippy, its presumable rival, has raised close to $13 million from its own fancy-pants group of moneybags: August Capital, Sequoia Capital, Charles River Ventures, Conway (again!), Twitter CEO and co-founder Evan Williams and other well-known investors.

To differentiate itself, the Providence, Rhode Island-based Swipely is trying to go for a more circumspect approach to what is essentially a service that encourages digital blabbery about purchases.

Swipely’s take on making shopping social will involve sorting out credit info and giving you, your friends and retailers a lot of options to share, and the service is stressing opt-in over automated sharing–as well as better security, taking aim after a recent Blippy breach–via a “swipe.”

Get it?

Unlike Blippy, Swipely does not show the amount of money spent–for now–and lards in data, such as catalogs, on some purchases to encourage others to buy too.

Swipely seems, most of all, to be aiming for the high-minded version of social spending. But, please let us not forget: All these attempts are trying to get people to spend more, no matter how pretty you dress it up.

Here is another screenshot (click on it to make it larger):

And here’s the official press release:

Swipely to Reinvent How People Shop, Share and Save

Index Ventures, Greylock Partners, First Round Capital and Industry Luminaries Unite to Back New Start-up with $7.5 Million in Series A Funding

PROVIDENCE, R.I.–May 11, 2010 – Swipely (swipely.com), an online service that gives users an easy way to turn their purchases into conversations, announced it has completed its Series A round of financing, and a new preview version of its service is now available by invitation. Index Ventures led the Series A round, with participation from Greylock Partners, First Round Capital, and a number of well-known angel investors.

“Our mission is to fundamentally change the way consumers shop and share by adding value to every swipe,” said Angus Davis, Founder and CEO of Swipely. “Our service will transform everyday purchases at restaurants, movies or online retailers into conversations with friends, personalized recommendations and opportunities to save money.”

Founded and backed by veterans of Tellme, Microsoft, Netscape, eBay, LinkedIn and PayPal, Swipely provides a secure platform for consumers to recommend purchase experiences, discover new places and products through trusted friends, save money, and have more fun shopping.

Enter Swipely

On Swipely, every purchase is a “swipe.” Users start swiping by following an easy and secure sign-up process to import purchases from their credit or debit card accounts. Users can also import purchases from email for purchases made at any online store.

Users can rate their swipes and add comments or photos. Many swipes are geo-located automatically to specific store locations. Swipely also supports product details by integrating catalogs and menus from more than 250,000 retail and restaurant locations, allowing users to start conversations around specific outfits, meals, songs, movies, gadgets and millions of other products.

Discovering a new restaurant, movie or pair of shoes is easy on Swipely when users follow their friends. Upon seeing a great swipe for a new restaurant, users can click to see it on the map, and add it to their wishlist. Discovering music, movies and apps is easy, too–users can just press play on select swipes to hear a song preview, see a video trailer or browse app screen shots.

Swipely places a strong emphasis on protecting consumer privacy and security, and has passed reviews and audits from leading third party security and privacy organizations. Users have complete control over swipes get posted, and the specific amount spent remains private.

Industry Leaders Across Coasts and Continents Unite to Back Swipely

Swipley’s Series A funding was led by Index Ventures, with Greylock Partners and previous investor First Round Capital also participating. Danny Rimer of Index Ventures will join Swipely’s board of directors, and Reid Hoffman of Greylock Partners will serve as an observer on Swipely’s board. To date, Swipely has raised $8.5 million in funding.

Swipely will use the funding to continue to grow the team and explore other benefits for consumers and businesses, including new ways for users to shop, share and save, and new tools to help businesses, understand and reward customers.

“We believe that the convergence of payments and social media is the natural next step in the evolution of the web. The notion of being able to use day-to-day transactions as a conversation element makes a great deal of sense and we expect it to be extremely popular,” said Danny Rimer, General Partner at Index Ventures. “Angus and the team have created the most compelling approach to enable this behavior and we’re very excited to be investors in Swipely.”

“We have been working with Angus since day one, when it was clear he had identified a huge opportunity with Swipely to change the way we shop and save on the Web,” said Josh Kopelman, Managing Partner at First Round Capital. “I’m excited to continue my support of Angus and his team as they take what started out as a visionary idea and turn it into a reality that will reinvent the way we talk our shopping experiences.”

“Swipely gets it right. Swipely offers a great service that helps consumers benefit from their card swipes,” said Reid Hoffman, Partner at Greylock, and Co-Founder and Executive Chairman at LinkedIn.

“Furthermore, the company has a great team: Angus is a seasoned tech entrepreneur with an impressive track record and it is great to work with Danny and Josh.”

Other Swipely investors include Lowercase Capital led by Chris Sacca, former head of special initiatives for Google; Keith Rabois, EVP of Slide, and former PayPal and LinkedIn executive; SV Angel led by Ron Conway; Anton Commissaris, previously SVP of revenue and business development at Mint.com and now director at Intuit; Lee Hower, venture capitalist and angel investor; Charles Moldow, former Tellme executive; and Emil Michael, White House Fellow and former Tellme executive. Davis is also a significant investor in the company.

The Start Project Gets Start-Up Stars as Advisers, Including Stone, Sacca, Mullenweg

Kara Swisher — Mon, 01 Feb 2010 21:57:00 +0000

A new Silicon Valley business incubator called The Start Project has recruited a high-profile group of entrepreneurs as advisers, which it announced today on its Web site.

Twitter co-founder Biz Stone, WordPress co-founder Matt Mullenweg, former Google (GOOG) exec and angel investor Chris Sacca, as well as Whiskey Media’s Mike Tatum and Jeffries & Co. Managing Director David Liu, have all agreed to help the company’s start-ups before and during their creation.

The Start Project is the brainchild of serial entrepreneurs Narendra Rocherolle of 83 Degrees, who co-founded a range of companies, and Josh Felser of Spinner and Crackle.

Polaris Venture Partners is also involved, lending office space in San Francisco and possible investments in whatever innovative ideas bubble up, with a first-look option.

“We can do a lot of stuff, such as pairing a CEO with an adviser with an amazing track record,” said Rocherolle in an interview with BoomTown. “It’s kind of a Justice League for start-ups.”

The Start Project’s description of itself on its Web site reads:

“The start project is a collaborative effort to bring great ideas to market. While the founders have a history of successful exits (over half a billion dollars), they are now focused on the initial stages of business creation including: idea generation, software development, product vision, team building, and investment.”

The Odd Tale of Facebook, TipJoy, the Deal that Didn't Happen and the Hire that Did

Peter Kafka — Sat, 22 Aug 2009 16:50:34 +0000

What’s next for the team behind Tipjoy, a micropayments service that closed its doors this week? For one of the company’s founders, it’s a job at Facebook–the social network that offered to buy the start-up this summer, then walked away from the deal.

In fact, co-founder Ivan Kirigin’s first day at Facebook was last Monday–four days before he and his wife, Abby, announced that they are shuttering their start-up.

Confused? You should be: This is one of the odder M&A stories I’ve seen in a while. Not surprisingly, the tale differs depending on who’s telling it.

Some basic, undisputed facts: Sometime this spring, TipJoy, a year old start-up that lets Web surfers “tip” bloggers and publishers, shopped the service to multiple parties, including Twitter and Facebook. By July, Facebook had offered, via a term sheet, to buy the company. Facebook then pulled its offer, and shortly after, offered Ivan a job. Now he and his wife are shutting TipJoy down and returning what’s left of the $1 million they had raised to their investors.

Also undisputed: No one has accused anyone of violating any laws, or contracts. Facebook’s offer was nonbinding and nonexclusive. And it’s not unheard of for companies to walk away from an M&A deal late in the process. That’s what happened, for instance, when Google (GOOG) bailed out after deep talks with Digg a year ago.

You could see why some of TipJoy’s backers, which include BetaWorks, the Accelerator Group, ex-Googler Chris Sacca and the Y Combinator start-up factory, might cry foul. The argument would be that Facebook’s actions effectively prevented the company from finding another buyer. But even if that was true, it doesn’t mean that Ivan Kirigin had to accept Facebook’s job offer and/or shutter his company.

Facebook spokesman Larry Yu declined to discuss the negotiations in detail, but offered this statement via email: “We take pride in operating in a transparent and ethical manner. We can’t offer any specifics here, but to suggest anything untoward occurred on our part simply ignores the facts.”

I’ve sent the Kirigins repeated requests for comment but haven’t heard back. Their statement announcing the decision to close their company doesn’t mention Ivan’s new job. But it does hint, obliquely, at their future plans:

When we evaluate why there’s been so much hype about payments on Twitter, and yet so little traction for us (and even far less for our competitors) it is clear to us that the reason is that a 3rd party payment service doesn’t add enough value. We strongly believe that social payments will work on a social network, provided that they’re done within the platform and not as a 3rd party….the only way to get around this is for the platforms themselves to control payments–then all people wanting to operate on that platform would have to play along. We believe that a payments system directly and officially integrated into social networks such as Twitter and Facebook will be a huge success.

UPDATE: Y Combinator founder Paul Graham, commenting on this story on his Hacker News site, says Facebook hired Ivan at his urging:

Facebook didn’t do anything wrong. Tipjoy was out of money. They’d been talking to several potential acquirers, including Facebook, but those deals all fell through. So the Tipjoys were going to have to get jobs somewhere. Since they were worried about money and Ivan admired the hackers at Facebook, I asked FB if they’d offer him a job, and they did.

It doesn’t portend anything for the future of startups, as this story seems to imply. If your startup tanks, you have to get a job somewhere, and lots of hackers get jobs at Facebook. There are several other YC alumni working there.

Ivan Kirigin also weighs in within the same comments section, and says that my report “completely doesn’t tell the whole story.” Ivan, I’m all ears, so either drop me a line or leave a comment below.

Note: I’m assuming that the commenters identifying themselves as Paul Graham and Ivan Kirigin in the comments section are indeed Paul Graham and Ivan Kirigin. But I’ve sent emails to both men so I can verify that. Update: That is indeed Paul Graham.

Silicon Valley Start-Up Whisperer (And Twitter Investor, Natch) Sacca Speaks!

Kara Swisher — Mon, 04 May 2009 12:28:49 +0000

Since leaving Google (GOOG) several years ago, where he last worked on wireless spectrum issues, it’s hard to say exactly what role the digital jumping bean who is Chris Sacca plays.

He’s not an entrepreneur, although he seems to know all of them in Web 2.0 world and advises 18 start-ups. He’s no longer a big-company exec, although he was one and knows a lot of them too. He’s not a venture capitalist, although he is involved in a private equity firm and invests in a lot of the start-ups he advises, like the red-hot Twitter, and knows those guys too.

Of course, Sacca blogs and tweets a LOT, even as he travels incessantly to Ethiopia, Dubai, and various places where Bono might be hanging.

(Thus, don’t miss this very funny mocking of Sacca’s tweets under the name fakesacca, reportedly done by Googler Dick Costolo, with pitch-perfect tweets like: “Wow, not sure what city i’m in. The food says London, the prices say Tokyo, and the women say Los Angeles. I’m going w/ Hong Kong,” “Going over my SXSW talk on ‘why I should have equity in your startup.’ Getting inspired just proofreading it” and, my personal favorite, “If you’re pole-dancing & heli-skiing & in the ny times w/in 12hr of each other, something has either gone horribly wrong or horribly RIGHT!”)

With all this dabbling Sacca does, BoomTown has decided to dub the Silicon Valley gadfly: The Start-Up Whisperer.

Here is my video interview with him, about those start-ups like Twitter and about what’s next in tech innovation, all while a lovely piano player at San Francisco’s Zuni restaurant tinkled in the background:

[ See post to watch video ]

When Twitter Met Facebook: The Acquisition Deal That Fail-Whaled

Kara Swisher — Mon, 24 Nov 2008 08:45:09 +0000

[Updated with new details about deal, including who worked on it and info on a cash component.]

About three weeks ago, Facebook and Twitter ended several weeks of serious talks, in which Facebook was offering to acquire Twitter for $500 million of its stock, which also included a cash component.

While rumors of Facebook’s interest were brought up in an interview with Facebook CEO Mark Zuckerberg at the Web 2.0 Summit a few weeks ago, some shot down the idea as silly.

Quite incorrectly, as it turns out, since top execs at both Facebook and Twitter were right then at the tail end of discussions, which were initiated by the privately held Facebook in mid-October, about bringing the two together.

Those talks, sources on both sides said, are now over.

So why did the deal break down?

Well, as is usually the case, over price–was $500 million worth of Facebook stock actually worth $500 million?–and the typical concerns about integration and costs.

But, more important, it seems, was a feeling among Twitter investors and execs that the start-up should still take a shot at building its revenues–there are none right now–as well as it had done at building its growth.

“It’s more about timing,” said one person familiar with Twitter’s motivations. “There is a strong feeling that there is still an opportunity–even with the economic downturn–to blow this thing out.”

Still, combining the world’s fastest-growing social-networking site with what is quickly becoming the best-known microblogging service is actually a natural fit.

That’s especially true given that Facebook–for all its powerful online social connections–has seen Twitter race past it in innovating in the “status update” arena.

While some sources at Facebook said Zuckerberg was becoming frustrated by the buzz Twitter was getting–a market that should have been dominated by Facebook–others at the company said he was interested in buying Twitter because of his respect for its progress.

Indeed, at the Web 2.0 interview, Zuckerberg called Twitter an “elegant model” and said that he was “really impressed by what they’ve done.”

Indeed, with about six million registrations, as reported in October, up 600 percent over the last year, the San Francisco-based Twitter–launched in 2006–has had impressive growth.

(It has also been plagued by technical issues, which are–to be fair–decreasing.)

In any case, for those not familiar with it, the premise of Twitter is dead simple: A registered user logs in via the Internet or a mobile phone and answers the “What are you doing?” question the service asks in only 140 characters or fewer.

It’s quite a clever idea, although–so far–not a money-making one.

To try to goose that, Twitter’s board replaced the engineer who created Twitter, Jack Dorsey, with another founder, Evan Williams, who had served as its chairman and chief product officer.

The more experienced Williams (pictured here) had already built one company–Pyra Labs, which created the Blogger blogging service–that he sold to Google in 2003. He also started the audio and video search site Odeo, where Twitter was actually born.

Still, its investors have not come down on Twitter to hold back its growth efforts, and have handed over $20 million to the start-up so far. In its last round, Twitter was valued at $98 million.

Its funders include: Union Square Ventures, Charles River Ventures, Digital Garage, Spark Capital and Bezos Expeditions, backed by Amazon Founder and CEO Jeff Bezos.

In addition, well-known Silicon Valley figures, such as Marc Andreessen and Ron Conway, have also invested. Interestingly, Andreessen is also on Facebook’s board.

Other private investors include FeedBurner Co-Founder (and now Googler) Dick Costolo, former Epinions Co-Founder Naval Ravikant and former Googler Chris Sacca.

Twitter needs all the investors it can get, since it has no revenue, although it has been exploring things like charging business customers and adding advertising into the consumer service.

Lack of revenues was an issue for Facebook, said sources, especially related to fees Twitter pays for delivery of its messages to cellphones.

While the issue has been manageable in the U.S., Twitter cut off its SMS support in some international markets this summer because of too-high costs.

But, if Twitter was offered to Facebook’s 120 million users, Facebook execs estimated that it might have to deal with huge SMS fees–up to $75 million annually.

“Facebook has its own revenue-generating challenges,” said one person close to the company. “As much as Twitter would give them a lift in the status area, it was still a worry.”

Not enough, said several sources, to stop Facebook from making another approach at some point in the future. “We’d hate to see Twitter go to another company,” said one source.

Indeed, while all are even more price-conscious than Facebook, large companies that could also be interested include: Google (GOOG), Yahoo (YHOO), Microsoft (MSFT) or a large telecom company, such as Verizon (VZ).

If it had completed the deal to buy Twitter, it would have been Facebook’s most significant acquisition by far.

Zuckerberg and Williams did meet and get along well, but the deal was primarily negotiated by Spark Capital partner Bijan Sabet (Spark is a Twitter investor) and Facebook deal guy Dan Rose.

But in this time, at least, the Twitter side was still not interested in selling at the price Facebook had offered.

The $500 million offered was in an all-stock form, said sources on both sides, at the $15 billion valuation that came from the Microsoft’s investment in the company last October.

The Twitter side felt that figure was inflated and the shares should be valued at the lower figures that have also been reported for Facebook’s true valuation, more in the $5 billion range.

That would have given the deal a $150 million price tag, which was seen as too low, especially since it was in Facebook stock and not cash initially.

In fact, Twitter wanted cash, which some sources say was offered by Facebook in the $50 to $100 million range, in addition to stock, but taking too much stock was still a major issue.

There are other ways the pair could have approximated a safer choice for Twitter, via warrants, of course, or other methods.

But, said several sources close to Twitter, the primary reason for not selling was because its board simply did not want to yet or perhaps ever.

Said one source: “The question is, is it really a good idea to sell on the first chance you get?”

Well, for Twitter, we’ll just have to wait and see about that, of course.

[Photo of Evan Williams by Joi Ito. Licensed under Creative Commons 2.0 By-Attribution license.]

Of Course We Could Just Blame the FCC for Our Refusal to Bid and Still Come Out Looking Like Heroes

John Paczkowski — Tue, 31 Jul 2007 20:32:54 +0000

Now that the Federal Communications Commission has voted to adopt only two of the ” ‘Four Opens’ of Successful Open Access,” the question on many minds is “Will Google bid in the upcoming 700MHz spectrum auction?”

In his July 20 letter to FCC Chairman Kevin Martin, Google CEO Eric Schmidt wrote, “should the Commission expressly adopt the four license conditions requested in our July 9 letter–with specific, enforceable and enduring rules–Google intends to commit a minimum of $4.6 billion to bidding in the upcoming auction.”

Are two out of four openness conditions enough for Google to make good on its pledge anyway? Because they’re good conditions: 1. Open applications, the right of consumers to download and utilize any software applications or content they desire; and 2. Open devices, the right of consumers to utilize their handheld communications device with whatever wireless network they prefer.

Certainly, it would have been nice to see the FCC adopt open services and open networks as well, but with incumbent telcos like Verizon and AT&T so vehemently opposed, it was probably never going to happen.

And Google likely knew this all along. So we return to the original question: Will Google bid in the spectrum auction? It just might, at least according to Chris Sacca, head of special initiatives at Google. Consider his comments during a recent interview with News.com:

Q: Google has recently said it would bid on the 700MHz spectrum only if the FCC guarantees certain open-access principles, including open access for companies wanting to buy wireless capacity wholesale. Does this mean that Google won’t bid on spectrum if the rules aren’t adopted?
Sacca: To be clear, what we said was not exactly that. What we said was that there had been some concerns that somehow imposing these openness principles on the spectrum might diminish its value at auction. And we wanted to reassure the FCC that embracing a path of full openness in the interest of users and the interest of consumers would not reduce the total revenue of the auction. And we wanted to put our money where our mouth is, and we are putting our money where our principles are. So we committed to spending a minimum of $4.6 billion in the auction, if they adopted all four principles.
Q: So it’s not out of the question that Google would participate in the auction, even if the FCC doesn’t adopt all four principles?
Sacca: We are deeply committed to changing this industry for the benefit of end users.”

There’s a little bit of the ol’ Google two-step there at the end, but Sacca does seem to suggest that it’s still possible that the company might bid in the auction.