Sex and the Valley
Privacy is Dead
The gender discrimination suit filed by Kleiner Perkins partner Ellen Pao against her employer has hit a potential snag. The hedge fund run by Ms. Pao’s husband, Alphonse “Buddy” Fletcher, has filed for bankruptcy, according to Dan Primack at Fortune.
Mr. Primack points out that while the bankruptcy and the suit could easily be unrelated, the possibility of family financial disaster could provide a motive for Ms. Pao seeking damages against the company.
IP Uh Oh
Of key importance to private fund managers engaging in fundraising, the JOBS Act directs the Securities and Exchange Commission (“SEC”) to eliminate the prohibition on general solicitation and advertising applicable to private offerings of securities to “accredited investors” under Rule 506 of Regulation D under the U.S. Securities Act of 1933 (the “Securities Act”). -JDSupra
For whatever reasons, sometimes startups and investors don’t want to talk about money. Publicly, that is. Amongst themselves, it’s quite standard.
There are myriad reasons why a source won’t disclose funding information to a journalist. A deal may not have closed, a company may be trying to fly low, or the financiers involved may be minor players who don’t want the spotlight. The secrecy may be because the investors and startups want to coordinate publicity in a way that has maximum impact (read: send press release exclusively to the TechCrunch rewrite robot). Sometimes, every party is worried about stepping on the other parties’ toes. But the reason given is always the same—blame it on the SEC.
After the president signs the JOBS Act today, that excuse will no longer be valid.
While you were distracted with the “nuclear situation” over at TechCrunch, Groupon, apparently, took the opportunity to make things even more toxic for itself in the press by once again flouting the SEC-mandated quiet period between filing for an IPO and actually going public.
Just before the long weekend, Michael Buckley from Brunswick Group, a PR firm employed by Groupon, not only called peHUB reporter Connie Loizos to complain about a story, but to get her facts straight, Mr. Buckley suggested taking a look at a leaked memo from Groupon CEO Andrew Mason that somehow found its way into Kara Swisher’s hands at AllThingsD. Yup, the very same leaked memo that Henry Blodget alleged violated securities law. Ms. Swisher’s role in that aside, as Ms. Loizos points out, the quiet period does not permit “calling journalists and urging them to read leaked CEO letters.”
As Fortune.com‘s Dan Primack sees it, however, the fault lies with the SEC, not Groupon. In the latest issue of the magazine, he makes his position clear with the headline, “It’s time to kill the IPO quiet period.”
Zynga, whose IPO Friday afternoon sent tech writers with their 4th of July bags packed into a last minute scramble, may be headquarterd out in the Valley. But its impending liquidity event will end up lining the pockets of earlylocal investors like Union Square Ventures, which reportedly owns 5.5 percent. In fact, Silicon Valley Bank’s Shai Goldman called it a “fund maker” for USV. But now that the fireworks have died down, Fortune.com’s Dan Primack has taken a closer look at Zynga’s S-1, comparing it to earlier regulatory filings, and found some discrepancies in the sequence of investing.
The Securities and Exchange Commission threw out five bullet points for what makes a VC fund. Dan Primack at Fortune rounded it up. 1. VC fund must invest primarily in qualifying investments, which generally are equity securities directly acquired by the fund. There is an exempt basket of 20% of a fund’s capital commitments. Read More