Sex and the Valley
Click through the slideshow for a firm-by-firm breakdown of the numbers.
The tech industry was shocked, shocked, when news broke last week that Kleiner Perkins Caulfield & Byers had been accused of discriminating against women in a lawsuit filed by a female partner.
It wasn’t just that a woman was accusing one of the most influential venture capital firms in Silicon Valley of sexism. It was that a woman was accusing Kleiner Perkins of sexism.
Kleiner Perkins, a Sand Hill Road firm that has more than $3 billion in assets under management, has 12 female partners out of 49. That’s a much higher percentage than the industry’s abysmal average, giving the firm a reputation for being progressive. “Overall, when it comes to women in the tech investing space, Kleiner Perkins has historically been perceived as one of the good guys,” wrote Colleen Taylor at TechCrunch.
And yet, the lawsuit filed by investment partner Ellen Pao alleges that, among other things: men were promoted before women; men were allowed to serve on multiple boards, while women were only allowed to serve on one board; men were paid more than women; and there was little support for women who experienced sexual harassment. Kleiner Perkins denied any wrongdoing.
The number of women in top positions is just one metric by which to judge whether a firm is a welcoming place for women to work. Still, it’s a telling one, as a Betabeat survey of the top venture capital firms revealed.
Never Say Never
Every teen pop star eventually reaches a fork in the road, around the time of his/or her eighteenth birthday, when things must change. Is it time for more emotionally mature musical stylings? Perhaps a venture into feature filmmaking? Maybe it’s the time for a few years of college? Then there’s always the classic drug-fueled descent into the gutter and/or rehab and/or obscurity.
Obviously, the adults in Justin Bieber’s life would prefer to avoid the latter. And since Drew Magery making a man out of him was out of the question, manager Scott “Scooter” Braun has another idea: venture capital.
The data service whizzes at CB Insights released a new report today on venture capital financing in the first quarter of 2012. On first glance, the news doesn’t look great for New York. The data shows that funding in New York dropped to a five-quarter low. “But the state’s deal activity stayed strong so we don’t think the decline is a problem (yet),” says the report.
Eep, was the parenthetical really necessary? Not likely. ”NY remains a hub for early stage investment with 30% of deals in the seed stage and another 30%+ in the Series A stage,” the firm added, assuaging fears.
Jack Leidlein, who was hired last week by First Round Capital to be their head of talent, really loves to use the word “exceptional.” It makes sense, though; the very core of Mr. Leidlein’s new job–recruiting brilliant engineers to fill the ranks at First Round-funded startups–hinges on exceptionalism, and his knack for finding diamonds in the rough.
This guest post was written by David Teten, Koen Bremer, Gyorgy Buslig, and Adham Hussein. David is a Partner with ff Venture Capital and Founder and Chairman of Harvard Business School Alumni Angels of Greater New York. Koen, Gyorgy, and Adham are all Columbia Business School MBA 2012 students and former consultants with McKinsey and BCG.
Even the best VCs and entrepreneurs have a painfully high failure rate. Lowering that failure rate would be highly impactful on venture capitalist returns, if we could figure out how to do it. In addition, in light of increasing competition in the startup funding space, a methodology for helping portfolio companies consistently is a strong competitive advantage.
Work It WeWork
WeWork, the cooperative workspace that cofounder Adam Neumann calls “the world’s first physical social network” just raised $6.85 million as they prepare to open yet another space in New York and their first in Los Angles.
The company, which rents office and desk space to startups, entrepreneurs and small businesses for as low as $275 a month is already up and running in California with their San Francisco office.
Mr. Neumann told Betabeat that this second round of capital was raised over a short period of time and explained that WeWork has had had various investment offers, but are picky about who they choose to work with.
“We try to choose only ‘we’ investors. Not just anyone we who offers us money— investors who have a ‘we’ mentality which means they care about the bigger picture… and think collaboration is the future of innovation,” said Mr. Neumann.
With $1.2 billion under management across three funds, Andreessen Horowitz has the capital and connections to invest in, well, pretty much any damn startup it sees fit, even at later stages when a company’s valuation starts to look a little bubbilicious.
Last February, for example, Andreessen Horowitz invested more than $80 million in Twitter through stock in the secondary markets. And that was despite not being part of Twitter’s recent (at the time) $200 million round led by Kleiner Perkins. The Journal chimed in: between Facebook, Zynga, and Groupon, Andreessen Horowitz could connect all four!
More recently, between leading sought after rounds in Fab, Airbnb, Foursquare, and Pinterest, it’s hard to come up with a hot Internet startup that Andreessen Horowitz isn’t involved in.
But as Dealbook’s Evelyn Rusli reports, it’s reach might grow even bigger.
Bonobos, the popular e-tailer that launched in 2007 with the promise of a better-fitting pair of pants (ones that could hug CEO Andy Dunn’s “surprisingly meaty thighs“), is raising a $15 million equity round. According to the company’s latest Form D, Bonobos has already raised $7,999,973 toward that goal, with $7,000,027 still up for grabs.
The issuer is listed as Bonobos itself and not Mr. Dunn in particular. The equity is offered in “Series C-1 Preferred Stock and the common stock issuable upon conversion thereof,” and the round is unrelated to a merger or acquisition.
Caught In The Webb
Let’s hear it for venture capitalists. I love venture capitalists. You know why I love them? Because they are irrepressible optimists. Look at what just happened. While the rest of the country was racked by the largest financial meltdown in 50 years, venture capitalists were giddy with excitement about technology’s ability to improve humanity and make them a nice buck along the way.
It’s easy to get cynical about them when you’re down in the trenches trying to start a company. It’s doubly easy to get cynical about them when you’re out there starting a “consulting” company and they don’t care one iota about investing in you….but I gotta admire them.
2009 was a crap year for a lot of people. My company nearly went out of business. Banks had a black eye from their, shall we say, less than austere lending practices. Since they couldn’t make it up by getting paid back from their bad loans, they called in a bunch of good loans early. Nearly every small businessman I knew in 2009 had their line of credit called in by the too big to fail banks. Lending had all but stopped. Yes, I’m still bitter about it.
But venture capitalists? Steady as she goes. Sure, in 2009 they ONLY invested around $20 billion dollars in over 3000 firms. But still. God bless ‘em. And sure, after the crash of 2001, they pulled way back, but a look at this chart tells you pretty clearly that by and large, come boom or bust, venture capital still flows.
IP Uh Oh
The latest numbers don’t bode well for those long suffering VCs hoping for an IPO exit. According to a poll from Thomson Reuters and the National Venture Capital Association, venture-backed IPO exits are at the weakest point, dollar wise, since the fourth quarter of 2009. In the third quarter of this year, only five such companies went public, down 77 percent from Q2 and 64 percent year over year.
That might be why New York magazine’s lengthy Twitter profile reported, “The intense pressure to convert Twitter into a profitable business, and before a tech bubble pops, is palpable here.”
But the bubble does come with another pressure valve.