That was July. Wednesday, Domo will announce that it has raised another batch of money, and is bringing in a new investor. The company has closed a $20 million round led by Institutional Venture Partners.

IVP, which had invested in Omniture and so has a history with James, is joining an all-star cast of investors including Benchmark Capital; Andreessen Horowitz; Ron Conway and David Lee of SV Angel; and Hummer Winblad, plus a bunch of personal investments. The round — which is being described as an A-1 round, brings Domo’s total capital raised to date to $63 million.

IVP general partner Todd Chaffee said Domo is an example of a dynamic management team going after a high-growth market. “We know Josh has the experience to build Domo into a disruptive and dominant player in a growing $10 billion market,” he said in a statement. Aside from Omniture, IVP has backed HomeAway, MySQL, Twitter and Zynga.

James wouldn’t tell me the implied valuation, but he did concede that it’s upward of “a couple hundred million.” And if that’s not surprising enough, what’s equally surprising is one possible use for the money: Acquisitions. Well, maybe.

“Let’s just suppose, and this is 100 percent supposition,” he told me over the phone Tuesday, “that we want to buy someone. We’ve thought about it. We’ve had potential targets cross the email threads. It’s not the right time to do that stuff just yet. But it’s nice to know we have the flexibility when the time comes.”

So where’s Domo, the business intelligence software-as-service play he was building? It’s running as a demonstration with a few early customers, he says. And he’ll have more to say about it publicly in about three to four months.

“We have a few thousand people who say they want to see a demo, and we’re working through that list,” James says. “The feedback has been more positive and at a higher rate than I would have thought possible. I think we’re going to have to figure out how to do a lot of installations all at once.”

That’s what we call a good problem to have.

Klout CEO Joe Fernandez said Kleiner Perkins lead the round, with Chi-Hua Chien joining the Klout board. KP partner Bing Gordon is also staying on the board. Fernandez wouldn’t comment on the price or valuation but called it a “strong round.”

Sources said the funding closed back in November and valued the company at about $200 million.

Other backers who participated included Institutional Venture Partners, Venrock, Greycroft Partners and ff Venture Capital.

Klout’s main product is a scoring system that measures people’s influence and reach on sites like Twitter, Facebook and Google+ — something that social media marketing types pay a lot of attention to. The concept of Klout scores has been somewhat controversial, but that seems natural for a system that quantifies a person’s worth.

Klout’s mission, said Fernandez, is “to empower every person by unlocking their influence.” He said Klout now handles 10 billion API calls per month, up from 100 million per month in January 2010.

Klout last raised $8.5 million a year ago. Its current business model is Klout Perks, where marketers can target influential people with free stuff. Fernandez said Perks are going well, with 300,000 people having received them last year, but “there’s a lot more we can evolve to.”

Earlier this morning, Zynga announced it would price its stock between $8.50 and $10 a share when it goes public later this month.

That’s at the high end of the range that values the four-year-old company at as much as $7 billion. But that’s much lower than than what some investors paid as recently as February, according to documents filed with the Securities & Exchange Commission.

In fact, some of its investors are already underwater.

One of those investors is Morgan Stanley, which is also one of the company’s underwriters in its IPO. In February, 11 mutual funds associated with Morgan Stanley purchased 5.3 million shares at $14 apiece for a total of $75 million. Four other investors, which were unnamed, also contributed to the round totaling $490 million, according to the document.

At $14 a share, the company’s value in February totaled nearly $10 billion, or roughly 43 percent greater than today’s high-end of the range.

Zynga justified the higher stock price back in February, stating that the U.S. economy had improved and that the public markets were being receptive to Internet stocks, including generous valuations for privately held companies such as Facebook and Groupon.

Furthermore, in March, the company used that valuation as a guide to purchase shares back from five of its early investors and its CEO Mark Pincus at $13.96 a share.

While the market conditions have likely changed since then, it’s important to note that things are still in flux. If the company drums up enough demand for the 115 million shares being sold over the next two weeks, the price could move even higher.

As Kara Swisher previously reported, Pincus will not sell any shares in the offering, and no other executives at Zynga have plans to sell stock, either.

But a number of the company’s early investors will be cashing in. Institutional Venture Partners, Avalon Ventures and Foundry Venture Capital will sell 2.5 million shares apiece for up to $25 million each. Union Square Ventures will sell 2.2 million for roughly $22 million.  Google and Silver Lake Partners will also both sell 1.7 million shares for a proceed of $17 million each.

Google was originally not listed as an investor when Zynga filed documents with the SEC to go public, but it showed up in subsequent filings. Google, which was rumored to have invested as much as $100 million in Zynga, has an interest in social gaming because of its Google+ network. Following the offering, it will continue to own 21 million shares, or about 3.8 percent of the company.

One notable shareholder that won’t be selling shares is venture capital firm Kleiner Perkins Caufield & Byers, an early investor in the company. Its partner Bing Gordon, who personally owns a 10.7 percent stake in the company, also does not plan to sell any shares.

According to sources close to the situation, neither CEO Mark Pincus nor one of its principal venture shareholders, Kleiner Perkins, will be selling any shares in its upcoming initial public offering.

While big investors often divest stock in IPOs, not all do. It is a carefully watched number by investors, who are always wary of insiders who unload a lot of shares in an offering.

But such activity by the fast-growing San Francisco online gaming company will be watched carefully since Pincus has recently been painted in a number of press reports as the greedy Mr. Potter of Silicon Valley.

Among the allegations is that he runs a poisonously tough culture that tracks its employees’ output and performance via elaborate data models that require extraordinary amounts of work, along with nefarious list-making of who’s naughty and who’s not.

That big-brother behavior has reportedly included taking away high-ranking jobs and the sweet stock options that go along with them from those execs found wanting.

While there is no doubt Pincus is a hard-charging personality, his defenders note that it’s due to a belief that life at Zynga is a meritocracy and that his practices are not any more heavy-handed than those at other firms.

Indeed, Pincus has a lot of competition in the tough-guy tech CEO category from longtime legends such as Microsoft’s Bill Gates, who set the gold standard for mean, as well as Amazon’s Jeff Bezos and now Google CEO Larry Page.

Pincus does not even rate in this pantheon, which is more typical of tech companies than anyone would care to admit or, to be fair, care to care about. With big benefits, vast wealth and much latitude, many in tech don’t mind the grueling work schedules.

After all, it’s not exactly ditch-digging, now is it?

In any case, sources said the coverage has hit Zynga staff hard, as well as Pincus, who has not responded due to the IPO’s quiet period. That’s in contrast to Groupon, the daily-deals site whose own rough process was rife with highly negative stories about the company’s prospects.

While those media accounts were more aimed at the business itself and less personal, Groupon CEO Andrew Mason vociferously defended the company in a controversial letter that was then leaked and published (to me and by me!).

Pincus will doubtlessly have a lot to say to investors who ask about the company’s culture and its possible negative impact on attrition, as some stories have charged.

His decision not to sell, sources said, was inspired by Zynga investor and close friend Reid Hoffman, who has sold very little of the stock of LinkedIn, where he serves as chairman.

The action all begins next week, according to multiple reports, when Zynga takes its show on the road in preparation for an IPO that is expected to value the company at $15 to $20 billion and will take place before the new year.

It will debut under the ZNGA ticker on the Nasdaq market.

While some have been worried about Zynga’s future growth, its past performance has been a lot stronger than other Internet offerings. In the first nine months of the year, the company posted $828.9 million in revenue, double the amount from a year ago, with net income of $30.7 million.

Pincus’s holding onto shares will be seen as a plus, of course, although he has sold a large amount of stock in Zynga’s history.

According to its S-1 filing:

“From our inception in October 2007 to date, Mr. Pincus, our Chief Executive Officer, Chief Product Officer and the Chairman of our Board of Directors, has purchased an aggregate of 149,197,328 shares of our common stock. To date, Mr. Pincus has sold an aggregate of 43,629,310 shares of our common stock at prices ranging from $0.42 to $13.96.”

Pincus now holds 91.4 million of Class B shares, 16 percent of the total, as well as 20.5 million of Class C shares, 38 percent of that group. Kleiner holds 65.2 million shares, or 11.2 percent, of Class B shares.

Other big Zynga owners, who might or might not sell at the IPO, include Institutional Venture Partners, Union Square Ventures, Foundry Venture Capital and Avalon Ventures.

The investment is a Series F, with prior investors Institutional Venture Partners, InterWest Partners, Mayfield Fund and Storm Ventures also participating. Neeraj Agrawal, a Battery Ventures general partner, will join Marketo’s board of directors.

Marketo CEO Phil Fernandez told me that he hadn’t been on the hunt for more funds. But recently he and his board decided to open the door to investors just a crack, and suddenly had many venture capitalists knocking. “The opportunities we’re seeing are just huge, and we decided to take an investment and grow the company,” Fernandez told me yesterday. “I’ve had a continuous stream of investors over the last year.”

Agrawal, in particular, had been interested in investing since early this year, and persistently kept in touch, Fernandez said. When the opportunity came, he jumped.

The investment, Fernandez says, gives Marketo a $70 million war chest that he intends to use to bulk up his team. “It gives us some working room to make some investments, to do some international expansion.” When I talked to him yesterday, he called from London, and said the new money will help fuel expansions into Latin America and Asia.

So what does Marketo do? It helps companies find and track sales leads and prospects using social media, the Web and in-person contacts at events like trade shows, in order to identify customers who are ready to buy — or, as Fernandez says, “the hottest of the bunch.” There’s also a set of analytics tools that helps companies sift through the many threads of data related to making sales and keeping customers. “It helps companies to understand how and why they’re growing, and then how to accelerate that growth.”

So far, Marketo has 1,500 customers, including eBay unit PayPal; McKesson, a $112 billion (2010 sales) health IT concern; and Rackspace, the Web- and cloud-services hosting provider. Those customers are hungry for more new products and services, Fernandez says, so more products are on the way. “We have three products, and a fourth cooking away in the oven,” he says.

Sales were in the ballpark of $14.5 million in 2010, and Fernandez says he’s on track to more than double that this year, which implies sales in the mid-$30 million range, all of it recurring revenue. He says he thinks he can grow it by 100 percent again into 2012.

Also: Acquisitions. Fernandez wouldn’t name any targets — who would? — but he did say he’s got some names in mind. “There’s an awful lot of innovative little companies out there that have a great product, but maybe didn’t build the same successful channel that we did,” he says. “So there’s a good chance to quickly monetize some products that we would acquire. We’re hot on the trail.”

Finally, Fernandez says Marketo is starting to mull an IPO. He’s not in any rush, and hasn’t hired any bankers yet. “We’re pretty aware that if we keep growing the way we have, we’ll be in a place where we can go public if the markets are open, so, we’re thinking about it.”

The shell company has grown through acquisition, picking up eight sites in the past two years, including RetailMeNot.com and Deals.com in the U.S., and VoucherCodes.co.uk in the U.K. In all, the company claims to attract 100 million unique visitors a year, most of whom are seeking discounts on anything from a gallon of milk to a pair of shoes.

This year, WhaleShark expects to be profitable on revenues exceeding $70 million.

The company’s CEO, Cotter Cunningham, told AllThingsD in an interview that the company is a classic roll-up. Its first $150 million in capital was spent on acquisitions, and that’s how it intends to spend its next $150 million.

Investors in the round include J.P. Morgan Asset Management and Institutional Venture Partners. Existing investors include Austin Ventures, Norwest Venture Partners, Adams Street Partners and Google Ventures.

To date, the company has raised nearly $300 million in two rounds.

“We are actively pursuing a number of acquisitions, and it will take us another year to spend the money,” Cunningham said.

The coupon-clipping business, while ancient, has gotten its sexy back in recent months, thanks to the success of Groupon and the consumer’s general shift in thinking to look for deals online rather than in the Sunday newspaper. VCs have recognized this behavior change and have gravitated to it like a teenager to Justin Bieber.

CouponCabin.com of Whiting, Ind., raised $54 million, Coupons.com secured $230 million in two megarounds, and CouponTrade.com has secured a more modest $2.4 million in capital. I’m sure there are many more that I’m forgetting.

Cunningham says a number of things are driving the trend, and while Groupon’s popularity has helped, WhaleShark is not a daily deals site.

“Groupon went out and created a whole new market with a big sales force,” he said. “They’ve done an amazing job of creating a new market focused on an interesting aspect of the coupon that didn’t exist two or three years ago. Our focus is more on taking the existing couponing model and moving it online.”

Essentially, it’s the newspaper circular that WhaleShark is going after. ”I’m a huge fan of newspapers, but yes, ultimately that’s what we are doing,” Cunningham ’fessed up.

Today, it has aggregated about half a million coupons, from 130,000 merchants, on its site. Many of them are uploaded by consumers, who received a free shipping code in an email from the Gap or Old Navy. Customers have self-reported to WhaleShark that they save about $20 on average per transaction.

The business won’t require even half the sales staff of Groupon. Today, WhaleShark has about 100 people at its Austin headquarters, and 40 people in the U.K. Cunningham anticipates adding 50 to 75 employees in Austin, and doubling numbers abroad.

The company earns a commission from about 10 percent of the offers it distributes on the site. Additionally, it hopes to support the sites through advertising as it attracts a large audience.

[Photo credit: sdc2027.]

The anecdote appears in a new profile of Dropbox in the latest issue of Forbes, which also disclosed that the service is on track to hit $240 million in sales this year, even though the vast majority of its users pay nothing to use it.

But the meat of the story comes further in: Dropbox just closed a massive $250 million Series B round of funding, at an implied valuation of $4 billion, from Benchmark Capital, Goldman Sachs, Greylock Partners, Institutional Venture Partners, RIT Capital Partners and Valiant Capital Partners. Early investors Sequoia Capital, Accel Partners, and Hadi and Ali Partovi also participated in the round, bringing Dropbox’s total funding to date to $257.2 million. Houston’s stake, Forbes says, amounts to 15 percent of the equity, which would be worth about $600 million.

Houston may yet live to regret turning Jobs down. The Apple CEO proposed another meeting that never happened, then managed to single out Dropbox for disparagement as part of his iCloud keynote in June. That got the attention of Houston, who quickly fired off a memo to his team that included a list of once-hot companies that later crashed: MySpace, Netscape, Palm and Yahoo. Apple — which once viewed Dropbox as the sort of “strategic asset” for which it keeps its $70 billion war chest stuffed — is now the competition.

That’s the valuation sources say the company earned in its most recent $54 million financing round. New investor Insight Venture Partners put money into the company, along with earlier investors Institutional Venture Partners, Bay Partners and GGV Capital, which led the round.

None of the money will go to employees or early investors, says Buddy Media CEO Mike Lazerow; instead it will be used to fuel expansion in Europe and to double the size of the company’s staff. The New York-based company has now raised more than $90 million, including a $28 million round last fall.

Buddy Media’s services aren’t exclusively for Facebook — advertisers can use them for Twitter as well, and as Google expands its social efforts, there will likely be room for Buddy there, too. But it is primarily in the Facebook business, via software it sells to brands which helps them navigate through the social network, which usually includes purchasing ads from Facebook, too.

That linkage (note that Kevin Colleran, Facebook’s original ad guy, is now on Buddy’s advisory board) means that many assume Facebook will one day end up buying Buddy. But I asked Lazerow about that last spring, and he said he had no interest in the idea– as it turns out, he was likely deep into the fund-raising process at that point.

And he says he still has no intention of selling anytime soon: “We feel like we can be a very large independent business, so why not scale the business today and build it up?”

Very long press release:

Buddy Media Announces $54M in Series D Funding From Leading Late-Stage Investors

Social Media Management Software Company Secures Growth Capital to Fuel Continued Rapid Expansion

New York, NY – August 15, 2011 – Buddy Media, the social media management software of choice for eight of the world’s top 10 global advertisers, today announced that it has raised $54 million in Series D funding from a group of leading late-stage investors.

The capital will be used to more than double its product, sales and support staff in the next year as well as fund additional global offices and acquisitions.

Current Buddy Media investors GGV Capital, Institutional Venture Partners and Bay Partners, as well as new investor Insight Venture Partners participated in the round. GGV partner, Jeff Richards, led the round and has joined the Buddy Media Board of Directors.

The investors each bring a wealth of knowledge and proven success to Buddy Media. GGV’s portfolio includes household names such as Pandora, SuccessFactors and Alibaba Group. Institutional Venture Partners has funded 300 companies since its inception, including Twitter and Zynga in the social space. Insight Venture Partners has been recognized by Red Herring Magazine as one of the Top Ten venture investors globally. And Bay Partners has had over 250 successful exits (IPOs or $250M+ acquisitions) over 35 years and have been investing around open social graph APIs since 2007.

“Buddy Media is at the center of the largest two-way communications revolution that the world has ever seen,” said Michael Lazerow, CEO and Founder, Buddy Media. “Our new funding ensures we have the resources necessary to accelerate the growth of our large, fast-growing software business. I am truly ecstatic to be working with such an amazing group of investors, and believe it’s a testament to our success thus far.”

The latest investment comes on the heels of massive growth and expansion for Buddy Media, including the following milestones:

· The company has added close to 200 new customers in 2011, including some of the world’s most recognizable global brands, retailers and media companies such as Ford Motor Company, Hanes, ESPN, Hearst Corporation, and Virgin Mobile USA.

· The company’s revenue has more than doubled since the end of 2010.

· The company has maintained a net promoter score of 75 in 2011.

· Employee headcount has grown from 40 employees in 2009 to almost 200, with continued massive hiring plans for 2011 and beyond.

· The company acquired social commerce and analytics leader Spinback in May 2011 and plans to complete its integration and roll out this month.

· The company opened its European Headquarters in London last month and hired Luca Benini, a senior executive from Comscore, as Managing Director, Europe.

· The company won the TechCrunch “Crunchie” Award for Best Enterprise application in January 2011.

· CEO and Founder Michael Lazerow was named New York Ernst & Young Entrepreneur of the Year in June 2011.

· The company recently hired Dennis Morgan as Chief Financial Officer. While at Yahoo!, Morgan led corporate finance efforts for more than $5 billion in acquisitions and business development deals .

· WPP, the world’s largest communications services group, announced a $5 million investment and global partnership with Buddy Media in October 2010.

Buddy Media’s technology is web-based (SaaS) software that provides companies global scale, secure architecture and straightforward administrative tools to connect with their current and future customers using the power of social media.

“Social media is now embedded in every aspect of the customer journey — from ratings and reviews to ‘like’ buttons to tweets. The opportunity for interactive marketing has evolved from building individual social applications to using social media to enhance a wide variety of marketing channels…” wrote Sean Corcoran in the April 2011 report by Forrester Research Inc., “Embedding Social Media Into The Marketing Mix.”

With the exponential growth of Facebook, Twitter and other social networking sites, Buddy Media’s new investors understand that the largest businesses in the world need powerful software to market globally.

“Buddy Media has a proven management team, sustained revenue growth and a massive market opportunity. The company is the market leader in a category that sits at the intersection of social media and software-as-a-service (SaaS), two of the largest and fastest growing markets in the technology industry,” said GGV’s Jeff Richards. “We are very excited to continue to support the company’s rapid expansion in the US and globally. Buddy Media has more than proved itself in terms of building the best team and product in the business. The numbers speak for themselves and I can’t be more excited to work with the entire team.”

“I have known the Buddy Media team for more than two years and have been very impressed with their ability to build innovative products that far surpass those offered by others,” said Insight partner Deven Parekh, who will be a Buddy Media board observer. “And the company has out marketed all others while providing stellar customer service. Buddy Media has what it takes to be a massive business.”

In conjunction with the announcement, Buddy Media has also announced that Kevin Colleran has joined its board of advisors and Michael Kassan has been named special advisor to CEO Michael Lazerow. Colleran previously served as Facebook’s first advertising sales executive, and was the company’s longest tenured employee outside of founder and CEO Mark Zuckerberg. Kassan is an internationally recognized business strategist, and currently serves as Chairman and CEO of Medialink, LLC, the leading advisory and business development firm.

The plan is to raise as much as $1 billion at an implied valuation of $10 billion, though The Wall Street Journal, citing people close to the situation, says the offering could raise as much as $2 billion and value the company at $20 billion. The company didn’t give a price range but said it had 562.5 million shares of Class B common stock as of March 31, plus an additional 20.5 million shares of class C stock.

The big number that everyone is going to focus on is the value of the $43 million compensation package going to executive VP and former Myspace CEO Owen Van Natta. That includes nearly $29 million in options and more than $14 million in stock awards. His base salary is $77,000 a year and he earned a $48,000 bonus is 2010.

Behind Van Natta was Steve Chiang, co-president of games, whose total compensation was north of $28 million, including $25.7 million in stock and a $2.9 million bonus. The bonus included more than $600,000 in a relocation bonus, the filing says.

Another big earner is CFO David Wehner, whose package is worth $18 million, $16 million coming from stock awards and $1.8 million paid in a bonus. Half a million of that was a retention bonus.

So who owns what? Founder and CEO Mark Pincus owns a big piece of the action. The filing shows he owns 91.4 million shares, or about 16 percent, of the Class B stock, and 20.5 million shares of the Class C stock. Both classes of stock are convertible into Class A common shares. Assuming the Journal’s sources are right and Zynga is worth $20 billion, then Pincus’s stake should be worth $3.2 billion on the Class B shares alone. (I’m not sure exactly how the Class C shares work into the calculation, but Pincus is the only one who has any, except for a block of 5.3 million shares that were sold to a bunch of mutual funds let by Morgan Stanley.)

Pincus, incidentally, is not only founder and CEO, but also Zynga’s landlord. The filing shows that the company leases office space he owns and paid him $500,000 in 2009 and $400,000 in 2010. The lease puts the current rent on the office space at $28,000 a month. Zynga also reimbursed Pincus $25,000 in 2009 and $120,000 in 2010 for the use of his personal plane, on occasions where he uses it for business travel.

Venture Capital firm Kleiner Perkins holds 11 percent, or slightly more than 64 million, of the Class B common shares. That works out to a stake worth $2.2 billion, assuming the $20 billion valuation.

Other venture funds with a piece of Zynga: Institutional Venture Partners, which owns 34.3 million shares, or 6.1 percent of the equity, worth $1.2 billion. Foundry Venture Capital and Avalon Ventures also have 6.1 percent of equity, or another $1.2 billion each. Union Square Ventures has a stake worth 5.5 percent, or $1.1 billion. And Russia’s DST Limited has a stake at 5.8 percent, worth $1.16 billion.

The filing says that Zynga has raised $845 million in three rounds of funding, though the filing makes it look like some rounds were closed in smaller increments. Other funds and individuals known to have invested — but not listed as major shareholders in the filing — include Andreessen Horowitz, the Pilot Group, Tiger Global Management, and Peter Thiel, head of Clarium Capital, according to its Web site.

Reid Hoffman, the former LinkedIn CEO who’s also a Zynga director, has 3.1 million shares, which amounts to less than 1 percent of the equity, though elsewhere in the filing, the value of stock awards as a director is valued at $9.5 million, assuming a grant price of $6.435 per share on the date of the grant.

Related posts

• The Zynga IPO: Who Owns What, Who Makes What
• Zynga Has Raised $845 Million in Capital, But No Mention of Google as an Investor
• The Zynga-Facebook Codependency Becomes More Clear
• Here’s the Zynga S-1 to Play With (Get It?!?)
• Zynga Finally Files for IPO to Raise $1 Billion
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Sassy women-focused content site, Sugar Inc., has raised another $15 million in late-stage venture funding from new investor Institutional Venture Partners, as well as its original one, Sequoia Capital.

The San Francisco-based site, which has now raised a total of $46 million, said it would “use the funds for brand extensions, acquisitions, and international growth…”

Sugar, which runs the flagship PopSugar.com site, is in a media space that is both competitive and fast-growing.

Several bigger sites, such as Yahoo, have been interested in acquiring it, but its husband-and-wife co-founders Brian and Lisa Sugar have wanted to remain independent.

In 2009, the company broke off ties with NBC Universal by buying back its shares and got a Series C funding of $16 million from Sequoia.

Sequoia was an earlier venture investor, having put $5 million into the start-up in late 2006.

NBC invested $10 million in 2007. The media giant had been selling online advertising for the site, an arrangement that had previously ended.

Onward and upward, apparently!

Here’s the official press release:

Sugar Inc. Closes Investment from Institutional Venture Partners and Sequoia Capital

San Francisco, CA, April 13, 2011–Sugar Inc., a fast-growing global media company for women, announced today that it has completed a $15 million later-stage round of financing led by Institutional Venture Partners (IVP), one of the premier later-stage venture capital and growth equity firms. The Company’s original and consistent partner Sequoia Capital also participated in the round.

Sugar intends to use the funds for brand extensions, acquisitions, and international growth in pursuit of its goal of becoming the world’s largest media company focusing exclusively on women’s lifestyle. This round brings Sugar’s total funding to $46 million.

Sugar is the online leader in original content, social media, and commerce targeting trendsetting women, with a global audience of more than 20 million. The company has two business segments focusing on original content and commerce with a portfolio of brands including PopSugar.com, ShopStyle.com, PopSugarCity.com, and Fashionologie.com. Sugar has 190 employees and operations in the U.S., Europe, Japan, and Australia.

“On the eve of our five-year anniversary, Lisa and I are proud of the success and rapid growth we have demonstrated to date,” said Brian Sugar, founder and CEO of Sugar. “In the last year we achieved significant milestones, including growing our audience to over 20 million unique visitors per month, driving over $250 million in commerce to our partners, and reaching profitability for the full year. We are excited with the opportunities ahead of us as we continue to pioneer the combination of content and commerce.”

“Sugar is led by an outstanding management team that has driven impressive growth in a diverse set of complementary revenue streams,” said Dennis Phelps, General Partner of IVP. “We see an enormous market opportunity and are excited about Sugar’s ability to execute in a world of slower-moving incumbents.”

“Brian and Lisa Sugar are entertaining a new generation of women. They do so around the clock and on hundreds of millions of mobile and web devices. But Sugar Inc. is still at the beginning of what is possible,” said Michael Moritz, General Partner of Sequoia.

Spiceworks has. Over four years, the company has evolved from an an ad-supported network mapping tool to something of a Facebook for IT pros. The social networking part happened more or less by accident. Now Spiceworks, based in Austin, Texas, has a community 1.3 million strong, and adding more than 2,000 new members a day, all of them making technology spending decisions for their small to mid-sized companies. Tech advertisers and vendors are naturally lining up to get in.

And so have the venture capitalists. Last year, Spiceworks landed a $16 million C round led by Institutional Venture Partners, known for funding Twitter and Zynga and Netflix. Other investors include Austin Ventures and Shasta Ventures with total funding at $27 million.

Spiceworks co-founder Jay Hallberg was in New York stopped by our offices in New York and we talked about how Spiceworks got started, where it’s going, and why you may hear IT pros asking each other about their “pepper level.”

NewEnterprise: So Spiceworks has been described to me as a sort of Facebook for the IT professional. How did you get to that point?

Jay Hallberg: When we started we had no idea that was what it was going to become. When we launched in early 2006 the idea was to build an application that would let IT professionals manage their networks. In small and medium companies there’s usually one or two guys managing all the IT issues. It was a free download, ad-supported, and it could catalog everything on a local network, anything with an IP address, PCs printers, storage, servers. The idea was that it was going to be ad supported. It turned out to be a wild success. They started downloading it like mad, and they started telling each other about it. Then they started asking each other questions and comparing notes in the forum we had set up. That was really when the spark took off. It was a lot more than a network application, it was a social application. We’re now adding about 2,000 users a day and to put this in some perspective, there are about 5 million IT pros in the world taking care of the needs of some 200 million employees. We have about a quarter of them in Spiceworks, about 1.3 million. Vendors started approaching us so they could set up pages where they could engage these people where they work, and it was natural to take another step and start selling the product.

But it’s still very much a management tool too?

Yes. We tend to think of it as three things. There’s applications, and so we build out just like Facebook has messaging and photos we build things the IT manager needs to get their job done. A help desk, inventory, monitoring, network maps. Secondly we have the community functionality. And finally we have vendors selling products directly within Spiceworks. The easy example is with printers. The Spiceworks app shows you what printers you have and the status of their ink cartridges. If you know the printer ink status why wouldn’t you help them order the ink when it needs to be replaced? Then you can start crowdsourcing information to compare what you spend on ink versus other companies.

And so far you target mainly people in mid-sized and smaller companies. Why not the bigger ones?

It’s used in some enterprises. But our view is that there are about 15,000 companies with more than 1,000 employees. The people who work at those bigger companies get personal attention from the big IT vendors like CA Technologies, and BMC and IBM. But what about the millions of businesses with fewer than 1,000 employees that don’t get that kind of infrastructure and attention from the big vendors? So we started advertising to those people, and then the vendors came to us and said they wanted to build features into Spiceworks. EMC will build a storage advisor. Intel has paid to build a tool to manage their chips better. Because of the reach we have, now these companies want to take their relationship with us all the way through to purchasing. One thing we’re just rolling out is that we’ll take credit cards, but we’re also creating a request-for-quote feature. So when a user says he needs to buy a few servers he can send that to several vendors. And then he can talk it over with his friends in the community and see if he’s getting a good deal.

You’re growing awfully fast. How do expect to maintain that pace? You’re getting fairly close to penetrating about half of your addressable market.

One reason we’re excited as that we certainly see getting to that 50 percent market because we’re starting to see a tipping point where one IT pro goes to another job and when he starts he looks around says ‘You’re not on Spiceworks?’ and soon everyone at his new job has joined too. For them their pepper level starting to become part of their professional identity.

What’s a pepper level?

So when you join you’re a pinmento. And then you move up as your stature grows to habanero and jalapeno. The highest level is pure Capsaicin, which is the molecule itself. There’s about 25 ways to get points. It’s primarily about making the best contributions, the best answers, helping other people solve problems. It turns IT into a bit of a game.

Although it’s a senior citizen in VC with 13 funds to its name, the late-stage investor is behind two of the Web’s hottest companies, Twitter Inc. and Zynga Game Network Inc.

And while many firms struggle to hit fund-raising goals, IVP recently closed a new fund at $750 million, its largest ever, blowing by a $600 million target.

Its partners think that’s because this is exactly the right time for its strategy as the road to exiting has grown longer and early investors and founders look for liquidity.

Although the firm is not lacking competition, “the supply-demand relationship in the late stage is quite attractive,” said General Partner J. Sanford “Sandy” Miller. Fund-raising data support this view: Early-stage and multi-stage venture firms raised $3 billion and $3.98 billion, respectively, in the first half of this year, according to Dow Jones LP Source; late-stage specialists raised a mere $500 million (this amount does not include IVP’s latest fund, which closed in the second half of this year).

Read the rest of this post on the original site

After a very long and decidedly strange funding journey, Foursquare has finally officially landed a new round of $20 million in venture funding, with Silicon Valley’s Andreessen Horowitz leading the new investment.

BoomTown reported last week that the new deal, which puts Foursquare at $95 million pre-money valuation, was in the bag.

Interestingly, it is only the second round for the New York-based social location start-up and includes its current investors, Union Square Ventures and O’Reilly AlphaTech Ventures.

Ironically, Andreessen Horowitz had walked away from earlier investment talks because of the excessive hype and indecision around the race to fund Foursquare.

But in an interview this afternoon with me, partner Ben Horowitz said that once Foursquare became firmer in its determination to build the company rather than selling it, his firm was all in.

“Basically, Foursquare made an important decision on the future of their company to build it into a really significant, independent business,” said Horowitz. “It’s a big step and we’re thrilled to back them in doing that.”

Indeed, the wrapping-up of what has been a very convoluted funding process comes after a series of missteps and switchbacks over what’s next for Foursquare, which allows users to “check in” from various places.

Among the twists: Serious but failed acquisition talks with both Facebook and Yahoo (YHOO), as well as a messy beauty pageant of other big VC firms, mostly in Silicon Valley, including Khosla Ventures, Accel Partners and Institutional Venture Partners.

The overhyped interest is because Foursquare and many others like it have seen strong growth and much innovation, although it is not clear yet if that will translate into solid businesses.

Still, Foursquare hit one million users in April and is now approaching 1.8 million, adding about 15,000 users per day. It uses a variety of game techniques and other features, such as the awarding of digital badges, to hold user interest.

And though small, it is trying to work with major brands, most notably Starbucks (SBUX), on a variety of marketing deals.

That requires money, especially given increased competition as everyone girds to race ahead first.

Foursquare’s original $1.35 million funding was raised from Union Square Ventures and O’Reilly AlphaTech Ventures, as well as some well-known angel investors, such as Twitter co-founder Jack Dorsey, Kevin Rose of Digg and Ron Conway.

Foursquare’s current investors also recently gave it a bridge investment.

Thus, Foursquare needed bigger funding, a process that soon became unusually complicated, in part because of indecision by CEO Dennis Crowley and in part because of some very public deal-making.

In fact, that’s what initially scotched very advanced funding talks between Foursquare and Andreessen Horowitz. The high-profile Silicon Valley firm–helmed by Internet icon Marc Andreessen and his longtime business partner, Horowitz–smacked Foursquare hard after those discussions and talks with other firms were leaked to the media.

In an exclusive interview with me in April, Horowitz took the unusual step of talking publicly about VC frustrations that are typical in deals around hot companies.

At the time, Horowitz acted as if he were checking out of Foursquare.

“We withdrew our funding offer to Foursquare and we are out,” he said in an interview with BoomTown then. “This is playing out too much in public and clearly someone has an interesting agenda here, so this is not something we want to participate in.”

At the same time, Horowitz left the door open. “If the process was changed, we still like the company,” he said then. “But since it has been long and undefined, it is prone to manipulation.”

That sentiment obviously changed, said Horowitz.

“A lot of the problems we were worried about were the result of their ambivalence on what to do, and so we were almost a distraction until they could decide,” he said. “Since they got clarity, it has been a very efficient process.”

Horowitz will become a Foursquare board observer and what he characterizes as a “CEO coach” to Crowley.

But he stressed that so far, the leadership of Foursquare was doing very well.

“I think they are clearly best of breed and very far of ahead of everyone else in what is a very complex business to get right,” Horowitz said. “There are definitely competitors large and small, but this company has a lot of experience and data atop a big vision.”

We’ll see, of course! And as hard a time as I have given him, Crowley–who sold his last company, Dodgeball, to Google (GOOG), which ended not so well–is definitely on another roll.

Until then, here are the blog posts by Horowitz and Crowley on the deal:

Why Andreessen Horowitz Invested in Foursquare

They say he’s a grinder
fly ass rhyma’
With a CEO’s mind bra’
–Kinfolk Kia Shine

Today we are extremely excited to announce that we are investing in Foursquare, a service that mixes social, locative, and gaming elements to encourage people to explore cities in which they live.

Here are the three reasons we invested.

1. A great Founder/CEO: Dennis Crowley

We prefer founding CEOs. In particular, we think the keeper of the product vision should run the company whenever possible because the toughest and most important decisions in technology companies are always about product strategy.

The only thing better than the CEO being the keeper of the vision is the CEO being the creator of the vision. In Foursquare’s case, Dennis not only created the vision for the company, but for the entire product category. Beyond that, he is very clearly the thought leader in the market. This is not at all surprising as he has been working on the problem for a decade and has highly refined his thinking through that period.

As importantly, Dennis embodies the kind of leadership that I described in Notes on Leadership. He’s the kind of leader that great technical minds will be excited to follow: visionary, righteous, and competent. I am really excited to work with Dennis to help him on his path from being a great leader to a great Chief Executive of an incredibly important company.

2. A killer product

When you look at the numbers, you’ll see that Foursquare is growing faster than Twitter did at this stage. In particular, their growth has been explosive over the past few months–they just hit 1 million users in April and now they’re approaching 1.8 million, adding around 15,000 users per day. It’s easy to see that people absolutely love the product. Less obvious to the competitors and pundits are the reasons why people love the product so much. I often hear people attribute Foursquare’s success entirely to check-ins or other easy-to-understand product features. It reminds me of the early days of Zynga when people thought the secret sauce behind Mafia Wars and Farmville were that those games were web-based.

It turns out Zynga games are wildly successful because Zynga has mastered the art of connecting friends via games–and they work incredibly hard behind the scenes to deliver what at face value looks very easy. How many times have you heard someone say, “I could have built Farmville in a weekend”?

Foursquare is very similar in that a lot of hard work behind the scenes goes into delivering a product that users love. Dennis and team have identified over a dozen different dimensions of the Foursquare product that must interact with each other in precisely optimal ways to achieve user delight. Years and years of research and sweat equity went into cracking the code, and the results are magical.

3. A gigantic market

At a macro level, over 4.6B people have mobile phones and there are 1.7B people on the Internet. Already, over 200M people worldwide have smart phones and that number is headed north fast. Foursquare might not win the entire smart phone market (some people don’t even like to leave their house), but it will capture a huge portion of it because it’s incredibly fun and addicting.

As importantly, we are very excited about Foursquare’s ability to make money in a way where all parties win: users, merchants, venue owners, brand advertisers, and more. In fact, users have been so excited about the product that they’ve actually been signing up local businesses to run promotions for Foursquare’s mayors and active users. This natural enthusiasm is happening even before Foursquare has added specific product features to help businesses run campaigns. As a result, major brands such as The Wall Street Journal, The New York Times, Zagat, Bravo TV, Starbucks, C-SPAN, Marc Jacobs and over 10,000 businesses are currently working with Foursquare to build customer loyalty and drive traffic. Not many companies have their users turn into their sales force, and it’s definitely a good sign that this is happening around Foursquare.

We are excited to be on this journey with our good friends at Foursquare.

We’re just getting started…

Hey all–

It’s been quite the year for foursquare. Last year at this time, Naveen and I–tired of working around my kitchen table–borrowed a desk from our friends at Curbed.com and Hard Candy Shell. Two months later we brought on our first hire (Harry!) and a few weeks after closed on our first round of financing: $1.35m from Union Square Ventures, O’Reilly AlphaTech Ventures and a handful of angels. Back then, our office looked like this.

Fast forward a year: We’re now 27 people strong. We can’t fit any more desks or chairs in our office so we’re borrowing cubes from our neighbors downstairs. We’re about to hit 1.8 million users and we’re seeing Super Swarms happen all over the world (Indonesia, you crazy!). In short, it’s been an amazing year for foursquare. A huge thank you to anyone that’s ever unlocked a Newbie badge!

And with that, we’re excited to announce that we’ve raised another round of capital. Today we closed on a $20m Series B round with Union Square Ventures, O’Reilly AlphaTech Ventures and our newest partner, Andreessen Horowitz. We’re thrilled to have the continued support of our original investors and additional support and expertise from the team at Andreessen Horowitz.

The two big names behind Andreessen Horowitz–Marc Andreessen and Ben Horowitz–are each legends in Silicon Valley. They know better than anyone how to transform startups into successful organizations. As we continue to rapidly expand to take advantage of the opportunities in front of us, Ben and Marc’s expertise in growing companies will be invaluable.

With this new round of financing, our main priority will be to expand our organization to supplement the amazing core team we’ve assembled already (know any great engineers? send them our way!). We’re hoping to build a world-class engineering organization, based primarily in our headquarters in the New York City to help us develop the next generation of mobile + social + local products that will excite our users and provide unique value for local merchants. The new investment capital will also help fund the infrastructure needed to house our team (we’re finally getting a new office!) and support our growing audience of nearly 2m users.

It’s been a crazy year for us and we’re expecting the next 12 months to be even more of an adventure. Look forward to more great product from us soon…we’re really just getting started.

–@dens and the rest of team foursquare

According to numerous sources close to the situation, Foursquare is in the final stages of striking a funding deal with the very venture firm–Andreessen Horowitz–that had publicly dissed the hot social location site and walked away from earlier talks.

The deal is likely to be completed and announced by early next week, at a valuation of about $80 million, barring unusual hiccups.

“Light at the end of a very long and very twisty tunnel,” joked one source familiar with the situation.

Indeed, the wrapping-up of what has been a very convoluted funding process comes after a series of missteps and switchbacks over what’s next for the start-up, which allows users to “check in” from various places.

The last curve came with serious talks for Foursquare to be acquired by Facebook, which came very close to happening–“one inch to the end zone,” as one person close to the situation described it.

But those discussions broke off largely due to price, strategy and control issues, sources said.

In addition, Foursquare had recently been in serious acquisition talks with Yahoo (YHOO) as well, along with endless rounds of chatter with a variety of prominent Silicon Valley VCs–including Khosla Ventures, Accel Partners and Institutional Venture Partners–over the last several months.

The overhyped interest is because Foursquare and many others like it have seen strong growth and much innovation, although it is not clear yet if that will translate into solid businesses. Still, many location-based companies are girding up with investments in order to race ahead.

That has also been the case with Foursquare, except its funding process has been unusually complicated, in part due to indecision and in part due to some very noisy deal-making.

In fact, that’s what initially scotched very advanced funding talks between Foursquare and Andreessen Horowitz.

But after discussions with Andreessen Horowitz and other firms were leaked to the media, the high-flying New York-based Foursquare was smacked back hard by the higher-profile Silicon Valley firm, which is helmed by Internet icon Marc Andreessen and his longtime partner, Ben Horowitz.

In an exclusive interview with BoomTown in April, Horowitz took the unusual step of talking publicly about VC frustrations that are typical in deals around hot companies.

At the time, Horowitz acted as if he were checking out of Foursquare:

“We withdrew our funding offer to Foursquare and we are out,” said Horowitz in an interview with BoomTown. “This is playing out too much in public and clearly someone has an interesting agenda here, so this is not something we want to participate in.”

In addition–after making an offer three weeks ago at valuations lower than have been reported, though he would not specify the exact number–Horowitz said he felt the company had conducted a “process that is very long and undefined.”

A company run by VC-pampered young geek dudes centered on game-playing was playing silly, immature deal games? This comes as a complete shock to…well, no one!

At the same time, Horowitz left the door open. “If the process was changed, we still like the company,” he said then. “But since it has been long and undefined, it is prone to manipulation.”

That sentiment obviously changed recently, as TechCrunch reported two weeks ago.

And indeed, it looks like Horowitz finally won that contest of hardball with Foursquare CEO and co-founder Dennis Crowley.

But it was a very close call, said many, who noted that Foursquare thought acquisition talks with Facebook were almost in the bag, something many sources said Crowley had wanted most of all.

And in fact, Facebook would have been a natural fit for Foursquare, on paper. The only fit, really: Facebook’s users already get the status-update concept, as well as the game-play part of the service.

And as MediaMemo’s Peter Kafka previously wrote:

“[Facebook] has something Foursquare won’t be able to boast of for a very long time: A sales team to match the location service up with big brands and a self-service ad platform that local businesses can plug into.”

Nonetheless, sources close to the company said Foursquare is now saying it wants more independence and more cash over stock in any deal with the social networking giant.

Dictating terms to the powerful Facebook seems unlikely to be effective. And sources familiar with Facebook’s thinking said the company simply felt it could do its own location service better, as well as federate many others in the arena.

Could that change? Sure, because when it comes to Foursquare, it seems like a wacky turn could be just around the corner!

Still, sources said that while the term sheet Foursquare has from Andreessen Horowitz is not quite done, it is nearly complete, with some remaining back and forth about the exact valuation for the social location start-up, the funding number and other small issues.

A spokeswoman for the firm declined comment.

Foursquare’s current investors–who recently gave it a bridge investment–will also participate in the new round.

Foursquare’s original $1.35 million funding was raised from Union Square Ventures and O’Reilly AlphaTech Ventures, as well as some well-known angel investors.

And then, after all the papers are signed, hopefully, we’ll all see what Foursquare can do with a new pile of money.

Of course, that is the greatest unknown of all.

That’s the job DoubleVerify wants. And the start-up just raised more money to help it get the gig. Institutional Venture Partners led a $10 million B round for the company, with earlier investors Blumberg Capital, First Round Capital and Genacast Ventures all reupping after a $3.5 million A round last May.

DoubleVerify’s basic pitch is directed at advertisers: It promises to make sure they are getting the media buys they paid for. The company says it can confirm, for instance, that a marketer that only wants to reach a U.S. audience on Yahoo (YHOO) doesn’t have its ads displayed to visitors in France–or that an ad network isn’t running invisible ads no one can see. It also promises to maintain “brand safety” for advertisers–to keep, say, a Jet Blue ad from running next to a story about the underwear bomber.

This stuff sounds small-time, but it’s a big enough concern for advertisers–and publishers that want to court them–to turn into a real business for DoubleVerify and a host of competitors.

DoubleVerify won’t disclose revenue, but says that since November, it has been generating enough to cover costs for a 45-person staff. My back-of-the-envelope math translates that into something like a $5 million run rate. (CEO Oren Netzer says I’m way low. Think “several multiples” of that, he says.)

The problem for DoubleVerify is the same one facing all start-ups that want to carve off a piece of the online ad market: There are a lot of start-ups that want to carve off a piece of the online ad market.

In DoubleVerify’s case, it is either getting paid directly by advertisers, in which case its fee gets tacked on to the ad buyer’s media spend, or by an advertising network, in which case its fee comes out of the ad buyer’s media spend. Either way, it is taking another slice of a piece that is already getting sliced quite thin.

Just days after selling $180 million in private stock to a group of investors, including Facebook funder Digital Sky Technologies of Russia, Zynga’s Mark Pincus came to visit the BoomTown Worldwide HQ for a video interview.

The San Franisco-based Zynga creates and distributes online games, including Mafia Wars and FarmVille, which are played on social networking sites like Facebook. It claims 60 million active daily users.

While playing, users can also buy virtual goods with real dollars.

Zynga took the pile of money, Pincus explained to me, so it would not have to do what everyone thought it was set to do soon: Go public.

But with 700 employees and a reported annual revenue “run rate” of $300 million, the fast-growing start-up needed more options, he added.

Thus, rather than selling out or going public, Pincus went for megafunding, a path similar to the one Facebook took.

Along with DST, which accounted for the majority of the funding, investors include Andreessen Horowitz, Tiger Global and Institutional Ventures Partners.

Previous investors in Zynga are Union Square Ventures, Clarium Capital, Foundry Group, Avalon Ventures, Pilot Group, Kleiner Perkins, along with personal investments from Silicon Valley players such as Reid Hoffman.

Pincus will need all that cash given that the arena is heating up and consolidating fast.

Playfish, a competitor, was recently snapped up by Electronic Arts (ERTS) for $275 million in cash and $125 million more in stock and earn-outs, for example.

This is not a fate Pincus says he wants for Zynga, instead insisting he would rather create a powerful and innovative standalone gaming company of the future.

Obviously, Zynga is the big shot at that prize for the longtime entrepreneur, whom I met way back when I was a reporter in Washington, D.C., in the early 1990s, when Pincus co-founded another start-up, called Freeloader.

In our interview, Pincus talks about the new infusion of cash, controversies around questionable “offer” advertisements that appeared on Zynga’s site and more.

Here’s the longish video:

And here is a video interview I did with Pincus, back in May of last year:

]]> http://allthingsd.com/20091218/zyngas-mark-pincus-talks-about-big-funding-offer-ad-controversies-and-more/feed/ 2 http://allthingsd.com/20090924/new-twitter-valuation-clearly-in-need-of-character-limit/ http://allthingsd.com/20090924/new-twitter-valuation-clearly-in-need-of-character-limit/#comments Thu, 24 Sep 2009 18:00:15 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=25446

]]> http://allthingsd.com/20090924/new-twitter-valuation-clearly-in-need-of-character-limit/feed/ 0 http://allthingsd.com/20090916/twitter-goes-for-broke-if-broke-means-a-lot-of-money-new-funding-round-at-1-billion-valuation/ http://allthingsd.com/20090916/twitter-goes-for-broke-if-broke-means-a-lot-of-money-new-funding-round-at-1-billion-valuation/#comments Wed, 16 Sep 2009 23:00:31 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=11036 Is Twitter a billion-dollar company? It is now, according to its investors. People familiar with the company tell me it has raised around $50 million in a funding round that values the start-up, which has no real revenue to speak of, at about $1 billion.

TechCrunch, which first reported the funding, says CEO Evan Williams informed his employees about the new deal at a recent companywide meeting. I’m told the round is all but finished: “If the money isn’t in the bank yet, it will be soon,” a source tells me.

No word on who has invested in the company in this go-round, but it’s almost certain Twitter was able to entice new backers to join its existing investors: Silicon Valley logic dictates that each successive funding round should attract new money.

In February, Twitter raised approximately $35 million in a round led by Benchmark Capital and Institutional Venture Partners that valued it at $250 million.

And just to spell this out–Twitter’s new investors, along with older investors who have reupped, believe the company will ultimately be worth much more than $1 billion. In order to get a return on their money, they will expect it to hit $3 billion or more.

Feel free to debate the merits of Twitter’s growth prospects, and its chances of creating a real business out of all of those 140 character messages its users create.

But in retrospect, this funding round seems obvious: Twitter’s founders have insisted that they want to build the company on their own instead of selling it to the likes of a Google (GOOG) or Microsoft (MSFT), and they’ve already turned down Facebook. And if they weren’t going to sell, raising yet more money to give the company time and resources to build out a real business is the logical choice.

Here are Williams and co-founder Biz Stone talking to Walt Mossberg and Kara Swisher at the D: All Things Digital conference in May. Discussion of the company’s future as a standalone business kicks in around the 31-minute mark.

]]> http://allthingsd.com/20090916/twitter-goes-for-broke-if-broke-means-a-lot-of-money-new-funding-round-at-1-billion-valuation/feed/ 0 http://allthingsd.com/20090408/irrational-exuberance/ http://allthingsd.com/20090408/irrational-exuberance/#comments Wed, 08 Apr 2009 16:43:09 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=16272 They say “flat is the new up” and that certainly seems to be the case with the venture capital industry. Because though we’ve had two consecutive quarters without an IPO and the venture market is all but frozen, VC optimism is beginning to return. The latest Silicon Valley Venture Capitalist Confidence Index shows a small but noteworthy uptick in the VC community’s views of the entrepreneurial environment in the San Francisco Bay Area. On a five-point scale, with five indicating that giddy all-trees-grow-to-heaven worldview for which VCs are known, the industry’s sentiment for the first quarter was 3.03 (click chart to enlarge).

That’s not great, but it’s a marked improvement from the 2.77 the Index registered in the fourth quarter–its lowest point in five years. Why the sudden change? “While concern over the state of the national and global economy and financial system remains, a sense of foreboding appears to be giving way to an expectation of eventual, if slow, recovery in the high-growth venture environment,” Mark Cannice, the author of the survey explains. “This mustard seed of hope appears to be taking sprout among a majority of the venture capitalist respondents who provided their insight to the March 2009 survey. And it is nurtured by venture capitalists’ faith in the resilience of entrepreneurs to build efficient enterprises with disruptive solutions, more modest expectations for growth and valuations, and the early stages of a stabilization in the financial system.”

In short, no reason at all. The economy is still deteriorating, perhaps less quickly than it has been, but deteriorating nonetheless. And venture investment is still declining. But there’s a sense that things are going to get better. And they surely will. Certainly, it’s not too difficult to do better than no IPOs two quarters running. And, as Sandy Miller of Institutional Venture Partners reasons, an economic environment like the one we’re in often gives rise to disruptive new technologies. “While the environment seems gloomy with no end in sight we need to remember that some of the best companies have been founded and built during bleak times,” he said. True entrepreneurs will continue to find ways of moving their ideas forward. From a venture investor standpoint 2009 and 2010 should be an attractive environment for new investments though there will be little liquidity for existing investments.”

As Sequoia Capital partner Michael Moritz often notes, the best time to invest is often “when people are cowering under their desks.”

[Image Credit: VC Wear]

]]> http://allthingsd.com/20090408/irrational-exuberance/feed/ 1 http://allthingsd.com/20090213/buisness-models-are-overrated-twitter-raises-another-35-million/ http://allthingsd.com/20090213/buisness-models-are-overrated-twitter-raises-another-35-million/#comments Fri, 13 Feb 2009 19:35:10 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=4274 See! Twitter did have news to report this week–but not about its elusive business model. The Web 2.0 microblogging-messaging platform everyone (or at least some of us) loves to obsess about has raised another $35 million.

Twitter has added Benchmark and Institutional Venture Partners to its list of investors, the company announced via a blog post today. Spark Capital and Union Square Ventures, which had previously invested in the company, have re-upped as well.

No details, of course, from Twitter about its current valuation. Last month the company was looking at raising $20 million or so at a valuation of $200 million to $250 million, and I’m told the new value is on the high side of that range.

The last time Twitter raised money, a little more than a year ago, investors pegged its value at just under $100 million. What’s changed since then? Well, it still doesn’t make any money. But it has many more users: The company says active users have increased 900 percent in the last year; comScore (SCOR) says the site’s home page now attracts 2.6 million unique a month, up 1,362 percent over the last year.

Anyone who’s ever read anything about Twitter knows that the company still has no revenue and/or business model–I just mentioned it one paragraph ago! So no need to go into that here. But for the record, note that co-founder Biz Stone, at the end of his funding announcement, says the company will indeed use some of its new money to go make…money: “We are now positioned extremely well to support the accelerating growth of our service, further enable the robust ecosystem sprouting up around Twitter, and yes, to begin building revenue-generating products.”

And for a nice summary of the company’s promise and peril, check out this week’s New York magazine. Money quote, literally, from CEO Evan Williams: “We have a product, and we’re working on it,” Williams said, with more than a hint of exasperation. “The money will come.”

]]> http://allthingsd.com/20090213/buisness-models-are-overrated-twitter-raises-another-35-million/feed/ 0