How much can you say, part II

We wrote a couple of weeks ago about the increasing trend among companies and venture firms to announce their plans to raise private money via news stories, including at VentureWire. We asked a couple of well-known attorneys then whether this might infringe upon SEC rules that prohibit general solicitation, and they said the announcements appeared to do so — though they were careful to add that each announcement needs to be looked at case by case.

Plaxo gets new CEO

Plaxo, the Mountain View online contact updating service that has fascinated some users but turned off others because of its privacy implications, today announced a new CEO. Ben Golub, previously the senior vice president of marketing and corporate affairs at VeriSign, gets the position. Here’s the release: Download file

Happy Holidays

Our musings will be scant over the next few days. We’ll resume in earnest early next year. In the spirit of holiday reflection, though, we’re recapping below some the themes followed over the past year — we’d welcome your thoughts about any or all of them, especially on how you think they’ll develop over the next year. We’ve been challenged and inspired by your contributions in 2004, and we look forward to more of them.

Sequoia hooks up with dating site eHarmony

The competitive tension between Silicon Valley’s two leading venture firms rose today, upon the announcement (see LA Times story, may require registration) that Sequoia Capital is helping pump nearly $110 million into online dating site eHarmony. The valley’s other top-dog venture firm, Kleiner Perkins Caufield & Byers, has backed Sunnyvale’s Friendster, one of the leading social networking sites for dating.

How much can you say when you raise private money?

Over the past year, it seems, more and more start-ups, venture capital firms and other types of private investment funds have been announcing publicly that they’re looking to raise money. Maybe we’re missing something here, but we thought that security laws forbid you from publicly soliciting funds — a way of protecting unsophisticated investors from being duped.

Savage beasts and bizarre IPOs

Silicon Valley is so surreal sometimes, it drives us out of bed in the morning without need of coffee. Our Mercury News carries pages of daily business news, but there’s no way it can cover all the quirky stuff going on here. Two items that made us stroke our virtual beard today, courtesy of VentureWire:

California mulling legislation to keep VC info secret

We’re just wondering what took them so long. Turns out, state leaders, led by the Regents of the University of California, are discussing legislation to placate venture capitalists upset by the disclosure of some of their secret info. UC and other state pension funds have irked venture capitalists by disclosing sensitive information like fees they pay to the venture firms to manage state pension and endowment monies, and their financial performance results.

Feedster joins crowd, at last

Feedster, the San Francisco search engine of feeds from blogs and other news sources, has at last gotten venture backing — though we’re not sure how much. The investor, the Omidyar Network, is known to support socially good causes and for investing relatively small amounts, but this space is interesting enough — including for VCs — that we shouldn’t conclude Feedster is becoming a philanthropy effort just yet.

SunPower keeps Silicon Valley on cutting edge

The world’s energy supply has become a hot topic recently (see latest coverage in the NYT), so we’ve been on the prowl in Silicon Valley looking for companies that are trying to find solutions. We’re assuming this is the place, with its cutting-edge technology, eager entrepreneurs and venture capitalists, that would devise some cool breakthroughs.

Things heating up in VC-land

You can tell from the relaxed manner of venture capitalists at recent Christmas bashes — things are getting better. The Woodside Fund brought out the big wines, Duckhorn and Caymus. Doll Capital Management, fresh from its hit with Chinese job site, 51Job, rented out the grand Asian Art Museum in San Francisco, offering an open bar and lavish food. Not to be outdone, Mayfield rented out the Computer History Museum last night, serving equally quality nosh. We bumped into Mayfield partner Kevin Fong who, while sipping at a cocktail, explained how much better things are this year than the past couple.

Solar will rival fossil fuels by 2011

Noteworthy article in Electronic Engineering Times, about how the U.S. Department of Energy is looking to the Stirling engine to unleash superefficient solar power by 2011. Alas, most of the innovation is happening in Phoenix and elsewhere. For California venture capitalists, 2011 is still a bit too far out.

Left turn for Kleiner Perkins, and the Darwinian world of VC

John Doerr, partner at one of Silicon Valley�s premier venture firms, Kleiner Perkins Caufield Byers, held a Q&A at today�s venture capital conference sponsored by Private Equity Analyst. Many of his comments at the San Francisco event were similar to those provided a few weeks ago during our own Q&A here. He only had a half-hour, so couldn’t cover much ground, but a few things made our notebook:

Sequoia's Valentine draws SAP's ire

Here’s a CNET interview with Don Valentine, partner at Sequoia Capital, one of the valley’s most successful venture capital firms. Nothing really new here, though we too were a bit puzzled by his attack on SAP. Jeff Nolan, of SAP Ventures, clearly has a bias, but here’s his response. Though we shouldn’t be too surprised at Valentine’s swipe at SAP. He has nothing to lose by poking fun at a “Teutonic” company from central Germany. I’d sit up, though, if he criticized a company based here in the valley, where Sequoia invests and can’t afford to burn bridges. As for his point about backing Oracle, my recollection is that CEO Larry Ellison was well on his way before taking any money. It was angel investor Don Lucas who did the heavy lifting early on.

Sell abroad!

I’ve been in London this Thanksgiving break, and the media here is blanketing coverage of the dollar’s plummet. Europeans hate it. It drives up the cost of their exports to the U.S. I’ll decline comment on U.S. fiscal policy for now, but there’s one important message here for Silicon Valley technology companies: If ever there’s been a time to sell into foreign countries, especially Europe and Japan, it’s now. Within three years, the euro has rocketed from 85 cents to $1.33 — making this a great time to grab market share.

China: If you can't beat Silicon Valley, join 'em

China’s government is thinking about creating a venture capital fund of as much as $122 million a year to support domestic semiconductor start-ups, a way of getting around complaints by outsiders (think Silicon Valley chip start-ups) that Beijing’s current policy of tax refunds has discriminated against foreign companies.

Google employee #12 latest multi-millionaire

How’s this for the American dream? Iranian-born Omid Kordestani (pictured left) gets pulled in for an interview in 1999, by Google co-founders Larry Page and Sergey Brin, who’d never hired a business operations person before. They bring in the whole Google team for a discussion, around the ping-pong table in their garage. Despite Kordestani’s suit and tie, somehow they agree that he’s a good fit. Kordestani then executes for five years, in one of the coolest business environments ever. IPO in 2004. Then he sells fewer than 10 percent of his shares (see latest SEC doc’s, here and here), and reaps around $40 million. Sound like work?

Keeping Silicon Valley a leader in "clean tech"

Clean Edge, a research and strategy firm that focuses on “clean technologies,” has released a noteworthy report for the City of San Francisco. It lists steps the City should take to maintain a leading position in the clean technology sector. They include leveraging the valley’s existing formidable resources: an environment-friendly population, an apparently commited leadership, and gobs of venture money. The report can downloaded here. The report also provides some useful listings, including the major “clean” companies operating in the San Francisco Bay Area, all the venture capital firms active in the clean tech, and some of the major conferences to keep an eye on.

Portal Player's huge IPO pop: So 1990s

It shouldn’t be a sign of success anymore to have a big first-day IPO pop of 50 percent-plus (see Reuters item below). Instead, a jump of more than say, 30 percent, should raise questions about the soundness of a company’s judgment. Why? If a company agrees to price its shares at $17, and then the stock trades at $28.50 — the company is losing out on huge amount of money it could have retained for its own operations. By selling its shares to bankers and their favorite clients for $17, and letting those people — who may have no loyalty to the company — turn around and sell shares for $28.50, the company is giving up $11.50. That shouldn’t be. Of course, you want to give investors an incentive to buy shares, and a 10 percent first-day pop is a fair. But Google showed the Dutch auction IPO — which lets the market price the shares — can work. Google wasn’t an exception, either. Several smaller companies have used the Dutch auction, and a product like PortalPlayer arguably has consumer appeal that would draw in buyers of its stock. The Santa Clara company develops semiconductors and software for personal media players such as Apple’s iPod.

Did Google Guru double dip?

Ram Shriram, the early angel investor in Google, looks to have made out even better than we thought. We already reported here how he may have made the best investment of all time, returning between 5,000 and 10,000 times his original money, pocketing about $1 billion. Turns out, Shriram was ALSO an investor in one of the venture capital firms that invested in Google in 1999, a year after Shriram invested. We’re not sure exactly which firm, because the SEC filing is vague (scroll down, and see last transaction and footnote #2). We’ve had enough experience with SEC doc’s to know that drawing conclusions can be risky. For all we know, this could be simple legal transfer from Ram’s own venture outfit, Sherpalo, to his personal account. But we’re assuming it’s Kleiner Perkins, which was previously an investor in Amazon.com, where Shriram once worked under CEO Jeff Bezos. Anyway, the filing is Shriram’s disclosure that he acquired 4,373 additional Google shares from the undisclosed venture firm (it could also be Sequoia, or even Conway’s Angel Investors). Icing on the cake.

Google puts Kleiner Perkins into the black

It’s also now official that Kleiner Perkins Caufield & Byers, one of Silicon Valley’s better known venture firms, has turned its hitherto money-losing ninth fund into a winner — on the back of Google. That $460 million fund, which Kleiner Perkins started investing in 1999, had been trailing at a -21.2 percent internal rate of return, according to recent University of California data.

Google Guys — billionaires at last

So far, their great wealth has all been on paper. The Forbes list of wealthiest Americans? The Google guys were on it, but we didn’t know when they would actually cash in. Now, Google co-founders Larry Page and Sergey Brin each plan to sell about 7.2 million Google shares as part of an 18-month “diversification” plan, according to a filing with the Securities and Exchange Commission today.

Voice SMS and the new Samsung Phone

We wrote here about Othmer (pictured on left, courtesy of Mercury News photographer Joanne HoYoung Lee) and his new technology, the Voice SMS. Well, here he’s holding the new Samsung phone, in which the Voice SMS will be first featured — in stores as soon as Monday. Thanks to Jeff Nolan for this link though, which shows it has “everything.”

Investing in a public company in China? Think again.

We’ve been raving on about the promise of China, and how Silicon Valley venture capitalists are scrambling to profit there. Other big Silicon Valley players are pouring resources into China too, the latest being Cisco, which just linked up with one of China’s biggest telecom companies, state-owned China Telecom, to build its next-generation Internet backbone.

Voice SMS, a technology that "doesn't need VC"

We just checked in with Konstantin Othmer, chief executive at Palo Alto wireless start-up Core Mobility. He’s come up with something called the “Voice SMS,” which we discussed in today’s Merc — and he’s getting paid for every single message sent by a Sprint. He’s now working on deals with other carriers.

Investor Don Lucas keeps truckin

Good things seem to happen when investor Don Lucas gets involved with companies. The folks at San Mateo’s Contactual (formerly White Pajama) recently informed us that Lucas has become an investor, so we hope for their sake Lucas is the druid they need to finish removing the curse from the company. We recently wrote here about the Curse of the White Pajama.