In a move reminiscent of one done by Facebook in 2009, Twitter is close to completing an $800 million funding deal that will include a second part in which around $400 million of the total will be used to cash out current investors and also employees.

According to several sources close to the situation, the complex transaction could be completed within two weeks.

Along with basic funding needs, this is largely being done this way to give those with stakes in the San Francisco microblogging company an ability to monetize their privately held common stock and also to do this selling in a more organized — and legal — manner.

That is especially important since the company is not likely to go public for at least a year or more. And, while it could also be sold to a bigger company such as Google, that is also not in Twitter’s immediate future.

Before this secondary follow-on, the first part of the deal will be a $400 million investment for preferred shares by new and also existing shareholders, as was reported by the New York Times last week.

That round will indeed value Twitter at $8 billion, as the Times reported, which is a higher number than in other earlier reports.

This is more than double what Twitter was valued at when it got $200 million in venture funding from Kleiner Perkins in December at a $3.7 billion valuation.

Once the latest investments are complete, Twitter’s total cash haul since it was founded five years ago will be $760 million.

Key new moneybags are expected to be Russian investing heavyweight DST Global, which has invested in Facebook, Zynga and Groupon; as well as the digital growth fund of J.P. Morgan and perhaps others.

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

The latest funding is an important one for Twitter and will up the pressure for its management, including CEO Dick Costolo, to really get its business growing in terms of revenue and profits.

Twitter is still struggling with coming up with a truly lucrative business model, and its execs have presented a number of them, such as promoted tweets, largely based on advertising.

It reportedly has $200 million in annual revenue from its efforts, which is still small in comparison to other Web 2.0 start-ups.

Interestingly, that was a similar situation to where Facebook found itself two years ago, when it allowed its employees to sell 20 percent of their shares.

That financing was part of a $100 million add-on to a $200 million investment in the social networking company by DST. At the time, the tender offer valued the company 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, so any Twitter sellers might want to consider their options carefully.

It is not clear exactly who can sell their Twitter shares, and in what amount, in the new deal. When Facebook did a similar move, for example, its top leadership could not sell any of their stakes.

A Twitter spokeswoman would not comment about any fund raising.

But, interestingly, in an onstage interview at a Fortune magazine tech conference this week, Costolo criticized stock trading of the shares of popular start-ups on secondary exchanges as a “distraction.” Like other companies, he said, Twitter had instituted stricter policies to limit the ability of its employees and investors to trade on those markets.

Jawbone, the maker of elegant mobile and wireless devices, has added $70 million in funding to its coffers, with a new investment from J.P. Morgan Asset Management.

The San Francisco-based company has now raised a total of $170 million, which includes a recent $49 million venture round from high-profile Silicon Valley VC firm Andreessen Horowitz in March.

Jawbone also has raised money from Sequoia Capital, Khosla Ventures and a number of prominent angel investors.

All are making a big bet on consumer electronics, an always dicey arena, and on Jawbone’s innovative products, such as its initial Bluetooth headsets.

The start-up has more recently expanded its offerings to the Jambox Smart Speaker, which has become a fast-selling wireless speaker.

Both have been particularly popular with Apple users, and Jawbone has been prominently featured in its retail stores.

Jawbone CEO Hosain Rahman certainly sounds like Apple CEO Steve Jobs when he talks about an all-encompassing digital solution.

“We’re going to get into some new categories of products,” said Rahman, about what he plans to do with the new funding, especially around making smaller, embedded and wearable devices. “We want to be an end-to-end experience.”

While he would not be specific, Rahman said that this area of computing is changing to encompass the entire mobile lives of its consumers.

“We want to leverage the power of the tool in your pocket,” he said. “This is just the beginning.”

Here’s the official press release from Jawbone:

JAWBONE SECURES $70M IN GROWTH FUNDING FROM J.P. MORGAN ASSET MANAGEMENT

Jawbone to Expand its Products and Services for the Mobile Lifestyle

SAN FRANCISCO –- July 12, 2011 –- Jawbone, a leading innovator of products and services for the mobile lifestyle, today announced it has secured $70 million in funding from investors advised by J.P. Morgan Asset Management.

Jawbone is one of the largest privately-held, venture capital-backed consumer electronics companies in the world, and this round brings total investment in Jawbone close to $170 million to date. The funding will allow Jawbone to continue its rapid growth and expand into new markets and categories, building on its successful portfolio of premium mobile products and services.

“We seek to invest in the best high-growth companies,” said Larry Unrein, managing director of J.P. Morgan Asset Management. :Given the widespread adoption of smartphones globally, we are seeing a massive shift in user expectations around having a complete, high-quality and seamless experience wherever they are. Jawbone, with its long-standing expertise in mobile user experience, has been delighting customers by enabling them to get the most out of their smartphones through a combination of cutting-edge technology and great design. We believe Jawbone is poised to be the next great mobile computing company coming out of Silicon Valley.”

“Funding from J.P. Morgan Asset Management is fantastic for us as we continue to rapidly expand our business,” said Hosain Rahman, CEO of Jawbone. “As people’s digital lives become increasingly centered around mobile devices, we see no shortage of opportunities for our technology and products to unlock the potential of a full mobile experience. The support of J.P. Morgan Asset Management will help us be even more aggressive in our pursuit of these opportunities.”

Jawbone’s innovation has resulted in unprecedented demand for its products and services on a global scale. The company is known for leading and disrupting categories with its breakthrough software, strong commitment to design, and award-winning products.

“Jawbone is one of the most important mobile companies with which Sequoia Capital has partnered,” said Roelof Botha, partner at Sequoia Capital and Jawbone board member. “Jawbone’s relentless building of great products that consumers love gives the company a unique ability to redefine established markets. We are delighted to have J.P. Morgan Asset Management on board.”

Jawbone first made its mark in the industry by creating an entirely new class of intelligent Bluetooth® headsets, and has successfully expanded its portfolio of products for the past decade. The JAMBOX Smart Speaker™ is one of the best-selling speakers globally, and the recently-launched Jawbone ERA™ headset is the first to include HD audio and motion sensors.

For more information, images and product demos, please visit www.Jawbone.com/Press, or follow @Jawbone on Twitter.

I love the smell of blog wars in the morning!

Acting as Facebook often does to Google, a new site started by former Engadget editor Josh Topolsky just hired away yet another passel of tech journalists from the giant gadget news and reviews organization.

Editorial movement is not uncommon on tech news sites, but this level of it from one site to another is somewhat, um, aggressive.

Engadget, which is owned by AOL, is one of the largest tech-focused sites on the Web. Topolsky left his editor-in-chief job there in March.

By April, he had grabbed eight prominent Engadget staffers who had left the huge tech site amid editorial tensions, in order to start a new competing gadget property for the well-funded sports content start-up SB Nation.

Now, sources said, Topolsky has added Thomas Ricker, an Engadget senior editor, who had run its European coverage; Sean Hollister, a senior associate editor, who ran its West coast team; and Joseph Flatley, an associate editor.

Also hired: Thomas Houston, editor-in-chief of Switched, an AOL tech site that was recently subsumed into its Huffington Post Media unit; and Dieter Bohn, who was editor-in-chief for the Smartphone Experts network of sites, including Crackberry and others.

And other possible new hires soon from Engadget: Another European editor, Vlad Savov, and writer Jacob Schulman.

The Topolsky-helmed site is still unnamed but is now operating as This Is My Next. It already has 16 writers, compared to Engadget’s two dozen, and is set to debut in the fall with a new name.

It will be the first content expansion at the Washington, D.C., SB Nation, which completed a $10.5 million Series C round, led by Khosla Ventures, in the fall.

Before that, SB Nation had already raised about $13 million in total venture funding from Accel Partners, Allen & Company and Comcast Interactive Capital, as well as from angel investors such as Ted Leonsis and others in Silicon Valley.

Another AOL link: SB Nation was founded by former AOLer, CEO Jim Bankoff, who had bought Engadget for AOL many years ago.

Engadget Editorial Director Josh Frulinger said that the impact of the talent drain on Engadget — mostly from This Is My Next raids — has been small, since the site has also been aggressively hiring.

“We’re past the people leaving and into celebrating what we’ve accomplished in six short months, and we welcome any new competition,” he said. “Dana Wollman, Brian Heater, Myriam Joire, Zach Honig, Joe Pollicino, Richard Lawler, Michael Gorman, Sean Buckley, Joseph Volpe, Brad Molen, Terrence O’Brien, Amar Toor and Sharif Skar — all brought on in the past six months — are your Engadget stars of tomorrow.”

To prove it, AOL said unique visitors for Engadget in June were up 1.1 percent from May and will be up again for July. In recent reports, the site had 14 million unique monthly visitors.

According to sources close to the situation, Intel Capital and Advance Publications will lead a $30 million investment round in Kno, the high-profile student tablet start-up.

In addition to the funding from its venture capital arm, Intel itself will consult with Kno on its tablet design. Kno, which is getting out of the hardware business, will now focus on its software to manage the devices that are aimed at the college market.

Intel will not manufacture tablets either. Instead, its engineers will consult with Kno on power management, graphics, display, systems integration, which it does for a variety of its customers.

Along with Intel Capital and Advance, current investors will also participate in the round, said sources. But Intel Capital and Advance, the owner of the Condé Nast publishing empire, make up a big part of the funding.

Sources said Intel Capital’s investment is $20 million and Advance and others make up the rest of it.

BoomTown reported in February that the much-funded and high-profile Silicon Valley start-up–aimed at making tablet computers focused at students–was considering selling off the entire hardware part of the business.

Sources said Kno execs have recently decided that the quicker-than-expected uptake in tablet production by a multitude of powerful device makers had made its efforts to package a seamless offering less critical.

Instead, the company will now focus on its robust software and services to offer students on the Apple iPad, as well as upcoming tablets based on Google’s Android mobile operating system and others.

The move is a dramatic shift for the company, which had not shipped significant numbers of the touchscreen device as it has long touted.

In fact, Kno said in November that it would ship a $599 and $899 version of the tablet by the end of the year.

The lower price was for its single-screen device, while the clamshell double-screen version was more expensive.

And, although it has been reported no pre-orders were fulfilled, Kno did indeed ship several hundred of them, built by China’s Foxconn, before stopping doing so earlier this year.

Many have been dubious about Kno’s ambitious hardware efforts.

That’s because marketing a new and complex product like the Kno takes a lot of effort and cash, especially since it is an increasingly competitive market for mobile and portable computing products that includes Apple, Microsoft, Hewlett-Packard, Google, Amazon, Dell and many others.

Before this $30 million, Kno has raised another $46 million in funding to add to an earlier $10 million round.

Sources in February said that the Santa Clara, Calif.-based company considering going back out to raise even more.

Its current backers include prominent venture players like Andreessen Horowitz and First Round Capital, along with angel investors Mike Maples and Ron Conway.

Sources said the shift to deliver textbook and other student-related delivery system would be a better path for all that investment money, since Kno has established a wide range of partnerships with colleges and universities.

In addition, Kno co-founder Osman Rashid has a lot of experience in digital education market. He was also the co-founder of Chegg, the textbook rental business that is reportedly aiming for an IPO soon.

BusinessWeek was first to report that Intel Capital was making the investment in Kno, but the post did not mention Advance’s involvement or that Intel itself was licensing the hardware design business from Kno.

Jim Bankoff, the fomer AOL exec responsible for buying Engadget for the Internet portal, has grabbed eight staffers who had recently left the huge tech site amid tensions, in order to start a new gadget property.

The site–which is still unnamed and will be run by outgoing Engadget Editor-in-Chief Josh Topolsky–will debut sometime in the fall. It is the first content expansion at the Washington, D.C. sports news site SB Nation, which is helmed by Bankoff.

“The technology we built is applicable beyond sports,” said Bankoff, in an interview with BoomTown tonight. “It was an opportunity to apply our model…into another content category where there was an overlap in demographics.”

That would be fanboys and, well, boys-who-will-be-boys.

UPDATE: In related news, sources said that AOL has zeroed in on Tim Stevens, Engadget’s automotive editor to replace the outgoing Topolsky. The New York-based company had already named Darren Murph as its new managing editor.

Now Stevens will be competing with Topolsky, as well as managing editor Nilay Patel, who will also lead the Engadget tech-exodus (techxodus?). The others include former Engadget staffers Paul Miller, Joanna Stern, Ross Miller, Chris Ziegler, Justin Glow and Dan Chilton.

Stern and Ziegler are still on Engadget’s editors site as current employees.

All of the above had left Engadget in a series of departures of late, all due to increasing unhappiness with AOL’s management and content strategy.

Paul Miller and Ross Miller, who are not related, both stated publicly that they did not like the editorial direction AOL was going in, especially a controversial content strategy document titled “The AOL Way.”

In his blog post, Topolsky threw another smackadoo at AOL, noting “SB Nation believes in real, independent journalism and the potential for new media to serve as an answer and antidote to big publishing houses and SEO spam–a point we couldn’t be more aligned on.”

New AOL content head Arianna Huffington has shifted toward a more journalistic path, but the talent bleed began before AOL’s $315 million purchase of the Huffington Post.

In a blog post, which is embedded below, Topolsky said the new SB Nation gadget site will be similar in pace and topic, but it will be broader than Engadget.

The move is an interesting one for SB Nation, which completed a $10.5 million Series C round, led by Khosla Ventures, in the fall.

It had already raised about $13 million in total venture funding from Accel Partners, Allen & Company and Comcast Interactive Capital, as well as from angel investors such as Ted Leonsis and others in Silicon Valley.

In related news, also restarting tomorrow will be a popular gadget podcast that Topolsky, Patel and Paul Miller had done for Engadget.

The New York Times’ David Carr mentioned the new site in the middle of a column earlier tonight.

Here is Topolsky’s blog post on the move, titled “This Is My Next Project”:

As you may have already heard (or read), there’s some activity going on in the world of Joshua Topolsky. Earlier this evening, David Carr published a piece in the New York Times about a new project that I’m embarking on…and I want to just say a few things about it.

Firstly: yes, this is happening. I’ve decided to join the team at SB Nation to build something brand new in the tech space. Now I know it might seem odd to some that I would be partnering with a sports publisher to build a technology news site, but that’s only half the story. This isn’t just about sports, or tech, or lone silos. What we will build together at SB Nation is a new media company–buoyed by the absolutely incredible work SB Nation has already done in publishing–and part of that new media company will be the as-yet-unnamed gadget and technology site that I’ll be working over the next few months to create. When we launch (hopefully in the fall), I will be editor-in-chief of a property that I hope will inform, entertain, and engage fans of technology in whole new ways.

I should say that I wouldn’t want to build something like this alone, and thankfully, I won’t have to. I’ll be joined by some very good friends at this new venture–people like Nilay Patel, for instance.

Of course, the natural question I’m sure a lot of people have is: why SB Nation? The easy answer is that the people at SB Nation share my vision of what publishing looks like in the year 2011. They think that the technology used to create and distribute news on the web (and mobile) is as important as the people who are responsible for the content itself. And that’s not just pillow talk–SB Nation is actively evolving its tools and processes to meet the growing and changing needs of its vast editorial teams and their audience communities. They’re building for the web as it is now. From the perspective of a journalist who also happens to be a huge nerd, that’s a match made in heaven. SBN isn’t just another media company pushing news out–it’s a testbed and lab for some of the newest and most interesting publishing tools I’ve ever seen. In short, I was blown away when I saw what kind of technology they’re using to get news on their front page and engage audiences, and even more blown away when I started talking to them about what could come next.

But beyond the technology (and possibly more important than the technology), there’s another factor here that’s driving my decision. It’s that SB Nation believes in real, independent journalism and the potential for new media to serve as an answer and antidote to big publishing houses and SEO spam–a point we couldn’t be more aligned on. This is a group of people that not only think independent media works, but are reaping the rewards of new publishing done right. As the fastest growing online sports publisher, they’re seen as a source for credible and honest journalism, which is why industry stalwarts like Rob Neyer have recently joined their ranks (ranks which include hundreds of talented sports experts). This isn’t tabloid page grabbing or content farming–it’s news and insight by and for a passionate and informed group of people. And that’s exactly where I want to be.

So, what happens next? We get to work.

In the coming months I’m going to be laser focused on one thing: building the best tech site in the world–and I would love to hear what you guys think the next phase in technology and gadget news should look like. Ping me with ideas, gripes, or even better–come and work here! SB Nation is looking for new developers as we speak, and as we ramp up to launch, we’ll be bringing on lots of talent to work both on the front page and behind the scenes.

I couldn’t be more excited and enthusiastic about what we can build right now, and I can’t wait to share what we’re going to make with the rest of the world. The months ahead are going to be filled with lots of early mornings and sleepless nights, intense debates, triumphs, and trials–and I can’t wait.

Another day, another honking big funding for another online start-up (and yet another broken embargo too!).

It’s like Groundhog Day in Silicon Valley as usual.

Today, Cambridge, Mass.-based HubSpot wins tech’s version of the lottery, grabbing $32 million from Sequoia Capital, Google Ventures and also Salesforce.com.

It is unclear what the valuation for HubSpot is now, although it is likely high given it has raised $65 million now.

HubSpot makes marketing software for businesses, who use it to find prospects and generate leads, along with tools to analyze the process. It claims it has “4,000 customers, over 50 percent market share, five million leads managed, and 70 million page views tracked monthly.”

The Series D financing included HubSpot’s existing venture investors–General Catalyst Partners, Matrix Partners, and Scale Venture Partners–and part of it will be used to cash out existing shareholders. In previous rounds, the start-up has raised $33 million.

Here is the official press release:

Sequoia, Google Ventures, and Salesforce.com Invest $32 Million in HubSpot
Marketing Software Company Attracts New Strategic Investors

CAMBRIDGE, MA–(Marketwire – March 8, 2011)–Today, for the first time ever, Sequoia Capital, Google Ventures and Salesforce.com all invested together in one company, providing HubSpot with a Series D round of financing through a $32 million investment. HubSpot provides all-in-one marketing software used by over 4,000 businesses to get found by more prospects, convert them into leads and sales, and analyze the entire marketing process.

“The fundamental way that people shop, learn, and buy has changed radically in the last few years. HubSpot helps transform the way businesses market from outbound marketing (cold calls, email blasts, and direct mail) to inbound marketing (Google, blogs, social media, mobile, etc.),” said Brian Halligan, co-founder and CEO of HubSpot.

Sequoia Capital has a long history of partnering with founders to help them build long-term, multi-billion dollar companies, including Google, LinkedIn, AdMob, YouTube, Yahoo!, Apple, and Oracle. “We back companies that are transforming their industries,” said Jim Goetz, General Partner at Sequoia Capital. “HubSpot is the emerging category leader in the SaaS marketing sector. Their customer base exceeds that of all the other relevant marketing software companies combined, including Eloqua, Marketo, Genius, and Manticore.”

“Today, every company needs to succeed in search, social, sales, and marketing–I can’t think of a more powerful trifecta than Google, Salesforce.com, and HubSpot. With 4,000 customers, HubSpot is already a clear marketing leader–now, with this new infusion of capital and recognition by Google’s venture arm and Salesforce.com, HubSpot has a great opportunity to separate itself from the pack and become the leading marketing platform in the small and medium business space,” said Brent Leary, co-founder of CRM Essentials.

Google Ventures Partner, Rich Miner (formerly co-founder of Android) said, “We agree with HubSpot’s belief that search engines, social media, and mobile devices have fundamentally changed how businesses should market themselves. We’re thrilled to support their efforts to help thousands of small and medium businesses reach potential customers.”

Dharmesh Shah, co-founder and CTO of HubSpot commented, “We founded the company based on a simple premise: Businesses want an easy-to-use, complete and integrated marketing platform that helps them get more leads and customers. We plan to use this new capital to further invest in this ambitious vision and further our existing lead in the marketing software category.”

Yet another “stealth” start-up came out of hiding today with a big Silicon Valley funding.

That would be Transphorm, a power conversion technology company, that has raised $20 million more in a Series C financing led by Google Ventures and including Kleiner Perkins, Foundation Capital and Lux Capital.

That adds to $18 million already raised.

Said the Transphorm about its goals:

“Inefficient electric power conversion results in hundreds of terawatts of lost energy across the electrical grid, equivalent to 318 coal-fired power plants and costing the U.S. economy $40 billion a year. Leveraging breakthroughs in modern materials and a world-class team, Transphorm’s ultra-efficient and cost-competitive power modules eliminate up to 90 percent of all electric conversion losses.”

Here’s the official press release:

Transphorm emerges from stealth to redefine energy efficiency

Company backed by $38 million from leading venture capital firms Kleiner Perkins, Google Ventures, Foundation Capital, and Lux Capital

New approach to electric power conversion eliminates multi-billion dollar efficiency losses

Mountain View, Calif. February 23, 2011–Transphorm Inc., redefining energy efficiency with the most efficient and compact power conversion technology, emerges from stealth mode today at a private event at Google Ventures. The company announced it completed a $20 million Series C financing led by Google Ventures, with participation from existing venture investors Kleiner Perkins Caufield & Byers, Foundation Capital and Lux Capital. This brings the total capital raised from all rounds to $38 million.

Inefficient electric power conversion results in hundreds of terawatts of lost energy across the electrical grid, equivalent to 318 coal-fired power plants and costing the U.S. economy $40 billion a year. Leveraging breakthroughs in modern materials and a world-class team, Transphorm’s ultra-efficient and cost-competitive power modules eliminate up to 90 percent of all electric conversion losses. From HVACs to hybrids, from servers to solar panels, Transphorm enables significant energy savings across the grid.

“We founded Transphorm to re-imagine what enhanced efficiency in the generation and use of electrical energy can do for our economy,” said Umesh Mishra, CEO of Transphorm. “Why put up with needless energy waste in every electrical system and device, when we can quickly and cost-effectively design products that are inherently energy efficient? Transphorm’s next-generation power modules cut waste, increase efficiency, reduce system size and simplify overall product design.”

“Since we deliver a complete solution from the original materials through to the final modules, we are in a position to rapidly innovate and deliver product in quick response to demand,” said Primit Parikh, President of Transphorm. “We look forward to helping our partners open a new era in ultra-efficient and compact power conversion.”

Founded by the experienced entrepreneurial team of Umesh Mishra and Primit Parikh, Transphorm boasts world-class engineers as well as top business and manufacturing executives who will guide the commercialization of Transphorm’s technology.

“Solving the enormous problem of power waste will create immediate, long-term shared value for Transphorm’s customers and investors,” said Randy Komisar, partner, Kleiner Perkins Caufield & Byers. “It was imperative for our firm to get behind Transphorm because it is the first company with a viable, commercial-scale solution to energy losses associated with high-voltage power conversion.”

Transphorm delivers custom-designed power modules that are easy to embed in virtually any electrical system, from consumer electronics products, to industrial motor drives, to inverters for solar panels and electric vehicles, and sells these modules to power equipment manufacturers. The company will unveil its first product at the upcoming APEC conference, taking place in Fort Worth, Tex. from Mar. 6 -10, 2011.

“We recognize the need to innovate to uncover new opportunities for optimal energy efficiency,” said Toshihiro Sawa, Managing Director, Technology & Development Division of Yaskawa Electric Corporation. “The time is right to develop power conversion technologies that can cut power waste and reduce excess heat, and Transphorm provides a viable solution today.”

“It is imperative that power conversion efficiency be increased both to cut unnecessary losses and to save energy, but also to reduce waste heat which has negative impact on volume, weight, cost and reliability,” said Dr. Leo Casey, CTO, Satcon Corporation. “The innovations made by Transphorm offer an attractive solution to this problem.”

Kno–the much-funded and high-profile Silicon Valley start-up aimed at making tablet computers focused at students–is considering selling off the entire hardware part of the business and is in talks with two major consumer electronics manufacturers to do so, according to sources close to the situation.

Sources said Kno execs have recently decided that the quicker-than-expected uptake in tablet production by a multitude of powerful device makers had made its efforts to package a seamless offering less critical.

Instead, the company will focus on its robust software and services to offer students on the Apple iPad, as well as upcoming tablets based on Google’s Android mobile operating system and others.

BoomTown could not determine which two companies Kno was in serious discussions with about unloading its hardware business, but the company has signed an NDA with one of them.

But, if a deal is struck, the move would be a dramatic shift for the company, which has yet to ship significant numbers of the student-focused touchscreen device as it has long touted.

In fact, Kno said in November that it would ship a $599 and $899 version of the tablet by the end of the year.

The lower price was for its single-screen device, while the clamshell double-screen version was more expensive.

And, although it has been reported no pre-orders were fulfilled, Kno did indeed ship several hundred of them, built by China’s Foxconn, before stopping doing so recently.

Many have been dubious about Kno’s ambitious hardware efforts.

That’s because marketing a new and complex product like the Kno takes a lot of effort and cash, especially since it is an increasingly competitive market for mobile and portable computing products that includes Apple, Microsoft, Hewlett-Packard, Google, Amazon, Dell and many others.

Kno recently raised another $46 million in funding to add to a $10 million round, and sources said that the Santa Clara, Calif., company was considering going back out to raise even more.

Its current backers include prominent venture players like Andreessen Horowitz and First Round Capital, along with investors Mike Maples and Ron Conway.

A Kno spokeswoman declined comment.

But sources said the shift to deliver textbook and other student-related delivery system would be a better path for all that investment money, since Kno has established a wide range of partnerships with colleges and universities.

In addition, Kno Co-founder Osman Rashid has a lot of experience in digital education market. He was also the co-founder of Chegg, the textbook rental business that is reportedly aiming for an IPO soon.

You can see Rashid here, along with the Kno tablet prototype in the full demo video that the company did last year at the eighth D: All Things Digital conference:

(Want to see it bigger? Click here.)

]]> http://allthingsd.com/20110221/exclusive-kno-student-tablet-start-up-in-talks-to-sell-off-tablet-part-of-business/feed/ 18 http://allthingsd.com/20110215/yahoo-marketing-vp-shane-steele-joins-twitter/ http://allthingsd.com/20110215/yahoo-marketing-vp-shane-steele-joins-twitter/#comments Wed, 16 Feb 2011 02:17:10 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=3624 Shane Steele, previously VP of global marketing for Yahoo, started at Twitter today as director of sales marketing. She’ll be reporting to Adam Bain, the company’s president of global revenue, who joined last year from Fox Interactive Media.

Steele is a longtime marketing exec with previous stints at the video ad start-up Tremor Media and Coca-Cola. She comes to Twitter at a time when the company is finally focusing on turning its service into a business. Twitter is expected to have about $100 million in revenue in 2011. It was valued at $3.7 billion in its most recent funding round, and well above that in off-and-on acquisition talks with Facebook and Google.

Steele’s Twitter account is here. Appropriately, we first learned of the news on Twitter, from Advertising Age editor Michael Learmonth. A spokesperson for Twitter confirmed the hire this afternoon.

]]> http://allthingsd.com/20110215/yahoo-marketing-vp-shane-steele-joins-twitter/feed/ 0 http://allthingsd.com/20110215/vcs-pay-up-for-secondary-chance-to-invest-in-web-winners/ http://allthingsd.com/20110215/vcs-pay-up-for-secondary-chance-to-invest-in-web-winners/#comments Tue, 15 Feb 2011 22:14:46 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=2594 Silicon Valley’s top venture capital firms pride themselves on finding future hits before anyone else. That’s how they get the best returns, have the most influence and build their brands.

But the current market tempts VCs to change the game plan by buying shares of late-stage Web companies wherever they can find them–from start-ups directly or from employees and previous investors.

VCs didn’t start the fire; folks like Yuri Milner from Digital Sky Technologies (Facebook, Zynga, Groupon) and private company marketplaces that help stave off IPOs, like SecondMarket and SharesPost, did.

But these new Web giants’ valuations just keep going up. Think Facebook’s valuation was bloated at $50 billion? After seeing huge demand at that price, a month later, the company is exploring selling employee shares at a $60 billion valuation.

Watching those numbers rise so quickly makes VCs lose their hang-ups about price and just want to get in on the hotness.

Kleiner Perkins is reportedly buying $38 million worth of Facebook shares from existing shareholders at a $52 billion valuation, according to VentureWire. Meanwhile, Andreessen Horowitz bought $80 million worth of Twitter shares on the secondary market, after not participating in the company’s recent $200 million funding round, led by Kleiner Perkins.

Both those firms, along with Battery Ventures and Greylock Partners, also invested in Groupon’s last huge round, after the daily deal site walked away from talks of a $6 billion buyout by Google.

It’s not just the big names doing such deals. Venture capitalists were the buyers in more than 40 percent of transactions on SecondMarket in the fourth quarter of 2011.

VC activity easily outpaced other buyers, which were individuals, hedge funds, mutual funds, secondary funds and asset managers.

According to SecondMarket Head of Public Affairs Mark Murphy, VCs representing the largest percentage of buyers is a recent trend that started in the third quarter of 2010.

This comes at a time when raising money for a VC firm is tougher than ever.

What are VCs buying on SecondMarket? Facebook accounts for the single largest portion of transactions, at 39 percent. After that are LinkedIn, Etsy, Chegg, Epocrates, Silver Spring Networks, CafePress and Reply, and some other companies that declined to be named.

SecondMarket does not share pricing or volume stats or trends, except to say it sold $157.8 million worth of stock in the fourth quarter, up from $75 million in the third quarter.

Some VCs are steering clear of secondary markets and late-stage deals. Redpoint’s Geoff Yang was willing to go on the record about it in a recent interview. “What do venture capitalists know about being a momentum hedge fund?” he said.

It’s not just proven hits big enough for the secondary markets that are attracting funding interest. Everyone is still eager to find the next Groupon or Zynga. The Q&A site Quora, led by former Facebook CTO Adam D’Angelo, raised $11 million at a valuation of $86 million last year before it had even launched to the public. After success with early adopters, the start-up is now fending off offers of much more money than that.

So there’s pressure to either get in very early, or get in late if you can, because the time in between is fleeting.

VCs are also actively trying to get more involved in seed funding deals. For instance, Google Ventures recently set up its Startup Lab to attract early-stage companies where it charges them $5 per month for office space (see our video tour). And just this morning, NetworkEffect covered how VCs are actually more active than angels on the early-stage investment matchmaking service AngelList.

]]> http://allthingsd.com/20110215/vcs-pay-up-for-secondary-chance-to-invest-in-web-winners/feed/ 2 http://allthingsd.com/20110214/ubermedia-raises-17-5-million-from-accel-index-and-steve-case/ http://allthingsd.com/20110214/ubermedia-raises-17-5-million-from-accel-index-and-steve-case/#comments Mon, 14 Feb 2011 17:04:37 +0000 Kara Swisher http://kara.allthingsd.com/?p=40732 UberMedia, which just bought TweetDeck for $30 million in equity last week, has raised $17.5 million, in a round led by Accel Partners.

The valuation for the Pasadena, Calif., start-up founded by well-known entrepreneur Bill Gross (pictured here)–which was actually struck some month ago–is $40 million.

Accel’s Jim Breyer will join the board of UberMedia, maker of social media reading and posting tools, which is currently largely aimed at the Twitter ecosystem.

“We are hoping to work very closely with Twitter, which is certainly our goal, as well as other social media platforms like Facebook,” said Breyer in an interview with BoomTown this morning, answering a question about previous tensions between Twitter and UberMedia. “There will be a lot of efforts to monetize Twitter and there is no silver bullet.”

Index Ventures and Steve Case’s Revolution Ventures also participated in the round.

The company did not reveal the amount raised, nor the valuation for UberMedia.

But many like him are trying to find a way to monetize the huge microblogging platform–including Twitter–and take advantage of its enormous scale.

Gross founded the start-up last spring.

Armed with $3.5 million in venture funding from a group of leading investors, including Index, Revolution, betaworks, First Round Capital and angel investors such as Mahalo’s Jason Calacanis and BuzzMachine’s Jeff Jarvis.

Started in Gross’s Idealab start-up incubator and called TweetUp (and then PostUp), it was initially cast as a keyword-based bidding marketplace akin to Overture/Goto.com, the first paid search system he created a decade ago.

TweetUp also offered an organic search service to surface the best tweets. This put it at odds on several fronts with Twitter, which began to aggressively move to take over key parts of its business that had largely been left to third-party developers.

That still remains UberMedia’s essential goal, and Breyer hopes that the new investment will show Twitter that UberMedia hopes to work in harmony with it, as other developers have done successfully with Facebook. (Accel and Breyer himself are big investors in the social networking giant, so he should know.)

“Like Twitter, we want to drive the customer experience,” he said, pointing out successes such as the Zynga gaming service. “This is a lot like Facebook several years ago and cooperation worked out well for everyone.”

Here’s the official press release:

Accel Partners Leads Investment Round in UberMedia, Jim Breyer Joins Board of Directors

PASADENA, Calif.–February 14, 2011–UberMedia, the leading independent provider of applications for reading and posting to Twitter and other social media platforms, today announced that it completed a financing round led by Jim Breyer of Accel Ventures. Existing investors Steve Case of Revolution Ventures and Danny Rimer of Index Ventures also participated.

“At UberMedia, our goal is to enhance the Twitter experience with functionality in our clients and to be the best partner with Twitter in growing and enhancing their ecosystem,” said Bill Gross, Founder and CEO. “In particular, the addition of Jim Breyer to our board will really enable us to succeed at this mission. His experience on the boards of Wal-Mart, Facebook, Marvel Entertainment, Dell and so many other high-profile consumer brands will be particularly helpful.”

“We’ve been watching closely Bill’s efforts at UberMedia to build upon the ground-breaking communications platform created by Twitter,” said Jim Breyer of Accel Partners. “We see a tremendous business in the kinds of innovations in user experience being developed at UberMedia. The result of these efforts will be an expansion in the number and variety of people engaged with Twitter as well as a method for advertisers to reach consumers in highly targeted and relevant ways.”

And here are two video interview I did with Gross last April when the company was founded:

]]> http://allthingsd.com/20110214/ubermedia-raises-17-5-million-from-accel-index-and-steve-case/feed/ 2 http://allthingsd.com/20110210/exclusive-facebook-exploring-tender-offer-for-1-billion-of-employee-shares-at-60-billion-valuation/ http://allthingsd.com/20110210/exclusive-facebook-exploring-tender-offer-for-1-billion-of-employee-shares-at-60-billion-valuation/#comments Thu, 10 Feb 2011 18:34:03 +0000 Kara Swisher http://kara.allthingsd.com/?p=40681

Facebook is exploring permitting a tender offer up to $1 billion of its employee shares, after being approached by a number of big institutional investors about investing in the company, according to sources close to the situation.

The new approximate valuation? An eye-popping $60 billion, sources said, which is a significant increase to a recent $1.5 billion investment round by Goldman Sachs and its international clients that had pegged the social networking behemoth at a $50 billion valuation.

And the reason? Liquidity, allowing Facebook employees to monetize their privately held shares, since the company is not likely to have an IPO for at least a year.

That’s been a big issue for Facebook as it seeks to walk the ever dicier line between being a private company and becoming a public company.

And managing how its shares are dispersed is critical, especially with regulatory concerns about these private secondary markets increasing.

All the machinating is because Facebook has tried hard–via ever bigger funding rounds and ever larger valuations–to delay its IPO, in order to grow its massive 600-million user base away from scrutiny.

The move is not dissimilar to one that the Palo Alto, Calif.-based company did in mid-2009, when one of its major investors, DST, forked over $100 million for employee shares in a transaction that was in addition to a $200 million investment.

At that time, current and former employees of Facebook were able to sell up to 20 percent of their common shares at $14.77 per share at a $6.5 billion valuation.

If completed, the new tender offer would be at a share price almost 10 times that. But sources said interest is high among big institutional investors who want a piece of Facebook before its inevitable initial public offering.

It’s likely the deal will be split between two or more investors, sources added.

A Facebook spokesman declined to comment.

The latest wrinkle is part of a massive race to invest in the winners of Web 2.0, often via secondary market sales.

Silicon Valley venture firm Andreessen Horowitz, for example, confirmed it had bought $80 million in shares of Twitter, in a story first reported here.

]]> http://allthingsd.com/20110210/exclusive-facebook-exploring-tender-offer-for-1-billion-of-employee-shares-at-60-billion-valuation/feed/ 3 http://allthingsd.com/20110209/exclusive-andreessen-horowitz-invests-80-million-in-twitter/ http://allthingsd.com/20110209/exclusive-andreessen-horowitz-invests-80-million-in-twitter/#comments Wed, 09 Feb 2011 19:13:24 +0000 Kara Swisher http://kara.allthingsd.com/?p=40605

Andreessen Horowitz has invested more than $80 million in Twitter via purchasing stock in private secondary markets.

When called about it by BoomTown, a spokeswoman at the high-profile Silicon Valley venture firm confirmed the purchase.

To be clear, Twitter does not get this money–early investors and employees able to sell their privately held Twitter shares do.

Buying into the secondary markets–which have recently attracted some controversy and regulatory scruntiny–has become a common way for VCs to invest in a hot start-up without a complex and competitive funding bake-off.

The move is an interesting one, since Andreessen Horowitz was not part of the recent $200 million round of venture funding at the San Francisco microblogging company, led by Kleiner Perkins at a $3.75 billion valuation.

Sources said that the firm made the move because it is already deeply invested in other key companies in the social space, including gaming giant Zynga, location-focused Foursquare, local discounting phenom Groupon and general social networking behemoth Facebook.

Apparently, Twitter makes it a full basketball team.

The investment by the firm gives more perceptual boost to Twitter, which is still trying to create a lucrative business model for itself, focused on advertising.

It needs to, if it want to stay independent for the long haul.

While an IPO is a possibility, so is an acquisition. Several months ago, while it was doing its funding round, Twitter had incoming interest from Facebook, which lobbed in a $5 billion soft offer, as well from Google.

]]> http://allthingsd.com/20110209/exclusive-andreessen-horowitz-invests-80-million-in-twitter/feed/ 3 http://allthingsd.com/20110125/upscale-nerd-newsletter-geekchicdaily-raises-2-million/ http://allthingsd.com/20110125/upscale-nerd-newsletter-geekchicdaily-raises-2-million/#comments Tue, 25 Jan 2011 13:00:51 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=28536 Yep, you can still raise money for email newsletters in 2011. GeekChicDaily, aimed at the fanboy contingent that spends heavily on movies, action figures and the like, has raised $2 million in a round led by Hollywood producer Joe Roth and Microsoft veteran Mike Slade. Also on board: Clear Channel/Pilot Group’s Bob Pittman, a newsletter kingpin (Daily Candy, Thrillist, etc.) who helped the company raise $1.5 million last year.

]]> http://allthingsd.com/20110125/upscale-nerd-newsletter-geekchicdaily-raises-2-million/feed/ 0 http://allthingsd.com/20110121/cheezburgers-30m-gets-the-taiwanese-animator-sendup/ http://allthingsd.com/20110121/cheezburgers-30m-gets-the-taiwanese-animator-sendup/#comments Fri, 21 Jan 2011 17:31:32 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=2580 As we reported earlier this week, Cheezburger, the company behind the LOLcat generator and Fail Blog, raised $30 million in a major round of venture funding.

I’m surprised this merits a send-up from everybody’s favorite Taiwanese animators–on the level of their takes on enhanced TSA security screenings or Lindsay Lohan getting out of jail–but our friends at Next Media Animation are savvy about the power of hanging on to an Internet meme or, in this case, an Internet meme sweatshop.

NMA depicts Cheezburger CEO Ben Huh as an evil stealer of memes, over-worker of cats and receiver of Internet flames. It’s pretty funny.

]]> http://allthingsd.com/20110121/cheezburgers-30m-gets-the-taiwanese-animator-sendup/feed/ 0 http://allthingsd.com/20110120/io-ventures-returns-to-train-second-class-of-start-ups/ http://allthingsd.com/20110120/io-ventures-returns-to-train-second-class-of-start-ups/#comments Thu, 20 Jan 2011 18:14:49 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=2523 With a swarm of start-up accelerators in the mold of Y Combinator all hitting the tech scene last year, it’s inevitable that some will fall by the wayside. But I/O Ventures, based in San Francisco’s Mission District, will be back for another season, co-founder Paul Bragiel tells NetworkEffect.

Bragiel bragged that of the six I/O Ventures companies from last year, one has been acquired (Facebook fan page creator Damntheradio by FanBridge), one is in late-stage acquisition talks (online video monetization platform SocialVision), three have raised funding of at least $400,000 from investors such as Max Levchin and Dave McClure, and the last (experience marketplace Skyara) is closing a funding round.

While I/O Ventures will continue to run with a curriculum quite similar to other start-up programs–soliciting young folks who have an idea but not much else, for a few months of intensive mentorship and events, followed by a “Demo Day” for investors–it has a few characteristics that set it apart. Mainly, the program is located in a building owned by its founders in the happening Mission District, home to a newly opened cafe called The Summit, which has become a bustling space for techie meetings and laptop sessions.

Bragiel said he expects to accept five to six companies once more, rather than swelling to a larger class, as Y Combinator has done. The program pays $25,000 and waives rent in exchange for eight percent of a start-up’s common stock. This year’s edition will include more events and more hand-holding around the initial company formation process, Bragiel said.

I/O Ventures continues to be funded by its four founding partners: Bragiel (who recently sold his forum company, Lefora), as well as BitTorrent co-founder Ashwin Navin, HotorNot co-founder Jim Young and Myspace co-founder Aber Whitcomb. It will accept applications through Feb. 15, with the sessions starting March 1.

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