VentureBeat

YouNoodle, an online community and website for entrepreneurs, just unveiled a feature that’s certain to attract (and anger?) plenty of curious users — a “startup predictor” that scores early-stage companies’ promise and feasibility, and even estimates what their value will be in three years.

The San Francisco startup already drew a fair amount of skepticism when it announced its intentions back in February. But VentureBeat Editor Matt Marshall thought the basic idea isn’t totally crazy, and after talking to chief executive Bob Goodson, I agree.

Here’s how the predictor works: You fill out a lengthy questionaire about a startup, which gathers information about four factors — the founding team, financial information, advisors and the concept. It crunches the data, then gives you a score based on a 1,000-point scale and a valuation. The goal is to provide investors with a quantitative, “scientific” guide to whether a startup will be a good investment.

Is there really a scientific way to measure something like team dynamics and potential? There is, Goodson says — the startup predictor draws heavily on social network theory, and it even has a Stanford Ph.D. student named Rebecca Hwang on its team who does research on that very subject.

Naturally, I had to get a valuation for VentureBeat. After plowing through page after page of questions, what really struck me is the emphasis that seems to be placed on the founding team, while questions about concept and finances are relatively sparse. For example, I didn’t have to enter any information at all about VentureBeat’s revenue or traffic, which is a bit odd. The reasoning is that YouNoodle (for now, at least) just provides a “snapshot” of a startup right when it’s getting out the gate, Goodson says. To use a metaphor from the press release, YouNoodle looks at a startup’s DNA, not its growth and development.

That’s also why the predictor wouldn’t provide a score for VentureBeat as its exists today, only as it was in January 2008 (before I joined). Now we’re too advanced, apparently.

Space Exploration Technology Corp., the company created by PayPal co-founder Elon Musk and better-known as SpaceX, has raised $20 million from The Founders Fund.

This is the first time SpaceX has raised outside funding, according to the Wall Street Journal; Musk previously invested $100 million of his own money. The news follows right behind the Hawthorne, Calif. company’s third attempted launch. The launch ended in failure last weekend, when the first-stage engine didn’t separate as required. The Falcon 1 (pictured left) carried three satellites — one for the U.S. Department of Defense, two for NASA — as well as the remains of 208 people who paid to have their remains shot into space, including astronaut Gordon Cooper and actor James Doohan, who played Scotty on Star Trek.

But Musk says a fourth launch is “almost ready” to go, and that the new funding is just a “precautionary measure.” Musk already has a connection with The Founders Fund, which was established by his PayPal co-founders Peter Thiel, Luke Nosek and Ken Howery. The Journal reports that SpaceX also held unsuccessful talks with aerospace company Northrop Grumman about a possible investment.

SpaceX has big goals — to make space travel, including missions to other planets, more reliable and affordable by a factor of 10. With three failed launches, it clearly has a way to go on when it comes to reliability, but apparently it’s not unusual to see these kinds of problems during the early stages of a rocket’s developent. SpaceX already has plans for 11 missions.

Ads that appear next to search results are one of the most valuable forms of online advertising, because they are matched with users’ searches for things they want to buy. You see an ad next to a result for what you’re looking for, then you click on the ad instead of the result, and make a purchase. But organizing large search ad campaigns gets complicated, because these ads are matched up with a user’s search results based on keywords submitted by competing advertisers.

That’s where Clickable comes in — and one reason why it has just raised a second round of $14.5 million from some marquee investors. The New York-based company provides web-based project management software that helps small to medium sized businesses organize their search-ad campaigns, replacing Excel spreadsheets that many of these advertisers currently use. It’s dashboard-style interface lets users plan search ads across search engines, including Google, Yahoo and Microsoft.

Clickable launched publicly in February — although we’ve been tracking it for some time — and it isn’t saying much about how it’s doing beyond that it’s gaining up to 200 new clients per month. But the funding is certainly a positive indicator for whatever is happening behind the scenes. It has raised a total of $22.5 million so far. The latest round was led by The Founders Fund, with existing investors Union Square Ventures and FirstMark Capital participating. Earlier individual investors also joined in, including Jon Miller, a former AOL chief executive, current Yahoo board member and Velocity Interactive Group partner, and Peter Thiel, co-founder of PayPal and Managing Partner at The Founders Fund.

Clickable is trying to be a comprehensive site for newbie search advertiser needs. It has built out its home site as a sort of learning community for beginner search-ad buyers — a group that otherwise experiences a lot of “churn,” with many people trying these ads and leaving, chief executive David Kidder tells me. The site includes user guides, case studies and other educational features. This community, in turn, has helped the site on search engine rankings, leading to more first-time customers who find the company through searches.

Among other features, the software includes a recommendation tool that lets advertiser see how well their chosen ad keywords are performing, or if a competitor’s keywords are doing a better job of reaching desired users. This feature recommends potential keywords to help an advertiser better target their ads and beat out competitors — faster and easier than crunching data about keyword performance within spreadsheets.

Larger companies providing search-ad optimizing services include SearchForce, Marin Software, Efficient Frontier and Omniture. These companies charge significantly more for complex optimization software designed for larger advertisers, while Clickable is aiming for advertisers who spend between $1,000 and $50,000 per month, Kidder says.

Closer competitors to Clickable include ReachLocal, Yodle and other companies aiming for small businesses that want to bring in more business through search results. These companies, like Clickable, also use on-the-ground sales teams and search ads to drum up business. Also of note to Silicon Valley advertising technology folks: Clickable made the point to me that its New York location has helped it develop relationships with media-world clients including advertising agencies — early users that have in turn helped the company refine its product. Finally, perhaps Clickable’s most direct competitor is Enquisite, which offers its own search ad keyword recommendation web software.

While Clickable is initially focused on search ads, it also plans to move into offering optimization services for clients running video ads, and other forms of online advertising.

updated
The Founders Fund, a maverick venture firm run by veteran entrepreneurs, has just raised a new fund of $220 million.

The firm will invest money from the fund, officially called Founders Fund II, in 15 to 20 early-stage startups.

The San Francisco firm has made a point of giving power to entrepreneurs in ways that many competing firms don’t. In its view, this focus is fixing the venture business model.

Specifically, it will continue its practice of offering start-up founders Series FF stock, that can be converted to preferred stock during following rounds of funding (more on FF stock, here). Preferred stock can let founders sell a portion of their stock while still running their companies. The firm also says it gives entrepreneurs additional voting power, to help them maintain direct control of their companies as additional investors are brought on board.

The first Founders Fund was $50 million from personal investments, and from select individuals. This time around, the money comes from institutional investors. In an interview Monday at their office at the Presidio, the firm’s partners said the investors had all requested confidentiality. The Wall Street Journal reports one institutional investor was Stanford University’s endowment arm — a backer of other Silicon Valley venture firms.

The Founders Fund managing partners are some of the younger investors in the Valley. They include two of many PayPal co-founders, Luke Nosek and Ken Howery (ages 32), former PayPal chief executive and hedge fund investor Peter Thiel (age 40) and iconoclast entrepreneur Sean Parker (age 28, pictured - our coverage of him joining the fund, here). The partners see themselves as bringing venture capital back to its roots.

The Journal article says some institutional investors were skeptical of the partners and passed on the opportunity to put in money. Parker confirmed that the fund-raising process turned out to be more time consuming than the firm had expected. But he also said limited partners had invested because their model — namely, a venture firm run by founders with experience — was needed in the industry. The firm originally sought to raise $150 million, but ended up raising $220 million.

Early Silicon Valley venture capitalists were entrepreneurs who made their money and wanted to invest in the next generation, Parker said. These days, as The Founders Fund partners put it, many VCs are investment bankers and MBAs who don’t have experience actually founding successful companies. [Update: An astute reader points out below that some of the earliest venture capitalists, including some of the best of them, were not entrepreneurs. This is true. However, there's also no denying that the "institutionalization" of venture capital in the late 1990s, which saw many funds grow to $1 billion in size, and having 8 or more partners, ushered in an era of the low-risk "career path" to VC, which hadn't existed in the early days.]

The resulting problem, as Parker says, is that entrepreneurs often know how to run their companies better than investors do, but are prevented from doing what they think is best. One example he gives is Friendster, which faced crucial “scaling” problems as it grew, several years ago. The load on Friendster’s servers, caused by the expanding number of calculations it was performing, was tremendous (see our discussion of the company’s graph server problem). That company’s venture backers couldn’t imagine a Silicon Valley tech company having scaling as its biggest problem, and they ignored its founder’s pleas for a greater focus on solving the problem immediately. Partly as a result of continuing site performance problems, users gradually left to other social networking sites.

Parker has learned such lessons first-hand. He helped found formative music-sharing service Napster and contact aggregator Plaxo, and was the president of Facebook during its early years. As many in the Valley know, Parker has had a long and turbulent history with established investors, especially Michael Moritz of Sequoia and other VCs who served on the board of Plaxo. He was also a friend of Friendster chief executive Jonathan Abrams, and witnessed through that relationship how even a company like Friendster, with a large lead in the social networking sector, and backed by the two big-name VC firms, Kleiner Perkins and Benchmark, could lose its way.

After surviving Plaxo and watching Friendster disintegrate, Parker took an uncommon approach to bootstrapping Facebook. When the company needed capital to build out its infrastructure in order to match its exploding growth, Parker obtained $250,000 in debt, which prevented him and the other early Facebook employees from having their stock diluted.

Then, Thiel stepped in with $500,000 — Facebook’s first angel investor.

Current Founders Fund investments include leading social network Facebook (via Thiel’s investment, from what we understand), along with widget-maker Slide, online genealogy mapper Geni, search engine Powerset, web analytics company Quantcast, and land-line calling service Ooma.

The Founders Fund may spend similarly small amounts of money on early stage companies, the partners say — whatever the startup needs. It will focus on what it knows best: Consumer internet companies, including social networking applications, especially in the US. However, the partners stress that they are “contrarian” to investment trends and will put money into any team they believe in, anywhere in the world, across industries.

Update: The Journal reports that the firm’s first fund, raised in 2005, had a “return of 23 percent net of fees,” which we’ll assume means a 23 percent “internal rate of return,” since that is the venture capital industry norm for measuring fund returns. This means it has earned 23 percent each year since investment began, which is much more than industry average. Investments typically take years to yield profits, and so most funds yield a negative IRR until their third year. We’re confirming that the WSJ meant IRR.

Jaxtr, a service for dodging international calling fees using your phone, has raised $10 million in series A round led by August Capital.

It says it has doubled in size in the last month to a million users.

The Menlo Park, Calif. company (more detail from our past coverage here and here [update: first comment below]) allows you to make free phone calls over the web or your mobile and landline phones, including low local rates for international calls.

When you sign up and make your first call on the web, you get a unique Jaxtr phone number and web address, such as www.jaxtr.com/mattmarshall.

People who want to call you can simply click on the web address link and get directed to your current phone number, as you have it pre-selected on Jaxtr — without you having to reveal your real number.

The company also lets you embed its widget on web pages so you can make or receive calls, say, on your Myspace account; it also launched a Facebook app in late May, but it only has a little over 12,000 users three months later.

Jaxtr has between 70 and 80 percent of its total users making and receiving calls from mobile phones simply because a Jaxtr number can be entered into a mobile address book like any other number, chief executive Konstantin Guericke tells us.

While Skype, Jajah and other internet-based phone services also provide ways to make free international calls, Guericke says this alternative phone number is more convenient for mobile users because they don’t need to download a mobile application, like Skype, or access a web browser, like Jajah. It’s similar to GrandCentral, the company bought by Google, which provides a single number you can use anywhere — although it gives you a single URL instead.

Eighty percent of total Jaxtr users live in 220 countries outside of the US, although Guericke says US users are three times as active, overall.

More than 16,000 users are now registering per day, the company says, with nearly three quarters of users in their 20’s.

Jaxtr was almost acquired recently, Dave Hornik of August Capital tells us — from another private company headed to an IPO (but not Facebook), he says.

While the offer would have been a good return for Jaxtr and its investors, Guericke says Jaxtr took the funding to try to replace the multi-billion dollar industry of selling calling cards with minutes for making international calls.

Jaxtr plans to make money by charging people who use more than their allotted 100 minutes per month; he hopes to get 20 million users in the next twelve months and is planning for only around one percent of these users to pay for additional minutes.

Other returning investors include the Mayfield Fund, The Founder’s Fund and three early Skype backers: Draper Richards, Draper Fisher Jurvetson and Mangrove Capital.