Startups raise money in rounds, often taking on multiple investors per round. Here's how the major types of funding work:

Venture capitalists

• A VC firm raises funds from investors, then invests it in startups, usually at upwards of $1 million per company (and sometimes as high as $12 million or more).
• A VC firm is buying a share of the company — anywhere from a tenth to a third, depending on how much the firm decides the company is worth before the investment.
• If the company needs more money a few months later, the firm may invest again, or a different firm might invest. Companies often raise funds from multiple firms in one round.
• VCs want at least three times their money back, though they expect most deals to fall through
• Many companies only take VC funding after they've used up the funding from their...

Angel investors

• These are often the first investors in a company, most always used before venture capitalists.
• Angels invest a few thousand dollars. As with VCs, several angels may invest in a startup at once, for a total round of anywhere up to about $1 million.
• They have less of a business interest but more emotional involvement.
• Angels can be friends and family of the investee, but some startups raise a preliminary friends-and-family round.
• Or they may go even smaller and rely on...

Personal credit

• When is it healthy to run up a 20%-interest-rate debt on plastic? When it's cheaper than running up a 200%-interest-rate debt on VCs.
• Of course, you could also rely on your own cash reserves, as many startuppers do with their second companies — Evan Williams, for example, who used his windfall from selling Blogger to Google to buy out the investors in his new company, Odeo.
• Ironically, credit card funding is a far cry from other way to borrow from banks...

Hedge funds

• The 90s bubble was partly blown up by VCs, but the big money came from hedge funds — an adventurous form of private investment fund.
• They're not as involved this time — the money's too small, at least for now — but they powered many a startup in the 90s, when more tech-savvy VC firms hadn't dominated the Silicon Valley funding industry.

So why are startups avoiding VCs? Because they're finding that angels, friends and family, and personal credit are less demanding funding sources, with lower expected returns, giving founders the freedom to take it slow and stay in control. Of course, VC money is hard to resist after a year of bootstrapping and dining at McDonald's.

For Start-Ups, Web Success on the Cheap [NY Times]

I'm poking around into the weeds at the side of the road looking for a "Web 2.0" (don't—just don't) startup to get rich in, preferably in six to eight weeks. Any leads?

Good question, Broad. There are several routes to dot-com success, all following an archetypal pattern: the Dirty Rotten Scoundrel.

Stage 1: Pick a startup

• Find something carpetbagging VCs are salivating for and will pay you cash for. "Citizen Media" is hot this month, what with the $1.65 billion YouTube buyout and Sequoia Capital's $5 million investment in PopSugar. That'll put you in Content Land, a magical place where companies get millions but spend pennies on bloggers (who, thanks to a weak dollar, are cheaper than Chinese World-of-Warcraft gold farmers).
• Or for a technology bid, play with buzzwords: Ruby on Snails, Abuser-generated content, Anti-bacterial Ajax. The stupider the phrase, the more exciting the business — after all, no competitors!

Stage 2: Grab the cash

• Shop for gullible investors. Smart ones will turn you down. Venture capitalist Paul Kedrosky, for instance, answered the reader's question with "Buy a tri-state lottery ticket."
• One way to find these investors is to look at other silly startups and see who paid them millions. Which distracted investor at Y Combinator invested in Kiko despite the plethora of other, better web calendar startups?
• Or run a blog search on Technorati for the phrases of an investor who's caught the fever: "__ doesn't get it" is the best mark of a true believer, but also look for "we talk through blogs" (the notion is pretentious and the use of we shows the writer thinks Web 2.0 is a club) and "Web 3.0" (especially if your startup works on mobile phones or 3d).

Stage 3: Hit the circuit

• Stirr, SF Tech Sessions, SF New Tech, SV New Tech, SF Beta — you could not only schmooze every night of the week, you could demo your site to hundreds of young VC associates, biz-development pros, and flacks.
• Pick a persona: regular Joe who had an idea in the shower, bold innovator in the model of Google's Sergey Brin, or nerdy engineer (minus the anti-social part, unless you have a wingman to "force" you to meet investors).
• Your conversation partner is having a gin and tonic. You are having a Sprite — either discreetly order so no one knows you're the only sober one in the room, or always take your car. "Just a soda, sorry — driving."

Stage 4: Grab the cash, part 2

• This stage is a great option if you skimped on Stage 2. Bootstrapping your own company means you can find a buyer and keep the money for yourself.
• You did remember to weasel out of promising your partners and employees any money, right?
• Repeat after me: "My financial advisor advises me to decline a vesting requirement." Substitute with "attorney" or "yoga instructor" as necessary.
• No, you can't sell to Google. They may know how to buy a company like Dodgeball or Blogger and let it rot, but even a lousy purchase has to look great at first. Can you really fake it that well?
• Two words: News Corp.
• One word: Viacom.
• You can't have your funding and eat it too — it'll be damn hard to find a gullible investor and a gullible buyer, and all the paperwork will become evidence when your scam is finally uncovered.

Stage 5: Run away!

• Cook the books, open a secret account, transfer the money and book it.
• Exit strategy 1: Mexico.
• Exit strategy 2: Russia.
• Don't even think about it: New York City. They may be even more nuts over dot-coms out there, but they're all hucksters. You will be the soft guy with the money, and a mob of ravenous bloggers will sink their jaws into your larynx.

Of course, Valleywag's commenters will have their own evil ideas for netting a quick million or two. (Won't you, kids?)

Peerflix has a simple business model: Charge users a nominal fee to trade DVDs or CDs, pocket a buck per trade, and build volume. So how much should it cost to pull such a site into profitability? Maybe two million bucks? Not for Peerflix.

[CEO] Mr. McNair said the company in late 2004 raised about $2 million from the venture firms 3I and BV Capital.... That cash would have been more than enough to last until mid-2006, Mr. McNair said, but Peerflix raised another $8 million in October 2005.... More money is on the way.

Now how could this company spend more than $10 million in three years? Is this site that far from running on its own revenue? Of course not — the math below shows why Peerflix should already turn a profit, making it a bad idea to take VC money.

Boring arithmetic begins
Run the numbers: The Times says Peerflix makes two bucks (one per user) per trade, and users are making 5 trades a month. Peerflix boasts 250,000 members. Using the industry rule of thumb for free-registration sites — 1 active user for every 10 registered accounts — that means 25,000 users are making a total of 125,000 trades a month. Even if Peerflix is padding their numbers (they are), they should be pulling in at least a respectable $200k a month — $300k if you count the part spent on shipping costs.
Boring arithmetic ends

$3.6 million a year is fantastic for a little startup with $2 million invested. But for a company that took $10 million, it's nothing special. The CEO shouldn't be bragging — he just gave away more control of his company for no good reason. If Peerflix expands (into CD and book trading, for example) after getting this money, the venture capitalists own a hefty chunk of the new business.

Why did Peerflix take the money? Maybe they plan to expand but don't have the guts to bootstrap; maybe they got greedy; maybe the smooth-talking VCs tricked them into it. But now Peerflix is just another in a long line of startups diluted by wasteful VC money, ruining a perfectly profitable idea.

I'll Trade You My 'Titanic' for Your 'Spider-Man' [NY Times]

Why so quiet, Feld?

Feld Thoughts [Feld's blog]
Tech Bust's Last Chapter Plays Out at VC Firms [Wall Street Journal]
Photo by Steve Lacey [Flickr]

— Beth Gottfried

The usual names are named — the venture capital firm Draper Fisher Jurvetson, Kleiner Perkins VCs John Doerr and Vinod Khosla. Missing are the Google co-founders and a few other players. But anyway, why do these players suddenly want to throw green at Green?

• Green looks sexy. This year, Al Gore managed to turn a Powerpoint Apple Keynote (thanks, reader Jordan!) lecture into two hours of entertainment. That's as sexy as environmentalism will get, post-Greenpeace.
• Green gets government money. Congress may finally put decent money toward clean-fuel efforts. And government contracts turn green into gold. (Note: When writing about environmentalism, journalists are required to use every possible "green" cliche.)
• Green doesn't have to be too green. Plenty of investors, including Khosla, are betting on ethanol as the fuel of the future. Thing is, some say ethanol is just as crooked a game as oil, and it's only a temporary fix. There's nothing a good tech mogul loves like planned obsolescence.

Green tech's growth [Mercury News]

At a pizza-and-beer party attended by youthful software writers and would-be CEOs in Seattle in late May, venture capitalist Greg Gottesman arrived in a smart white jacket that turned some heads. He looked like "he was about to attend brunch at the yacht club," said one attendee. Mr. Gottesman of Madrona Venture Group admits that in hindsight, the jacket was a mistake. While he thought the event would be a small affair, "I got in there, there were 500 people, it was 1,000 degrees, there was beer all over the place," he says. "It wasn't a great place for that jacket."

Mr. Gottesman, 36, says he doesn't think his attire "ruined his street cred" with the young crowd. "I did have a beer and a piece of pizza in hand," he notes.

That's it, Greg, you did all right! They'll totally let you into the Junior-Senior banquet!

How Venture Capital Is Trying to Get Down With Young CEOs [WSJ]

1. Check the numbers: Digg rejects Weblogs, Inc. Long before Kevin Rose's social news site reportedly rejected $40 million from Yahoo, Rose (pictured) rejected $4 million from Jason Calacanis, owner of blog network Weblogs, Inc. Did it seem like a great deal? Sure, until Rose examined the deal more closely. If he accepted, he'd give up control of Digg — and only end up with one million bucks, all said and done. Now, with Calacanis launching his own social news site at AOL's Netscape, Rose has no reason to worry — Digg's about to launch a souped-up new version to blow Netscape back out of the water.

2. Don't get cocky: Facebook rejects Yahoo This failed deal (only reported here on Valleywag may have been the last hope for Facebook. The school-based social site needs a buyout or IPO to pay back some heavy venture capital investments. With a growing staff bringing high operating costs, and sparse ads and partnerships on the site, Facebook is nowhere meeting the newer, more rigorous standards for a public offering. So when Yahoo offered a reported $1.4 billion buyout, why didn't Facebook jump into the arms of its white knight? Because someone in charge — at this point, probably the VCs — is holding out for $2 billion. Will anyone offer that before Facebook's old and busted? Don't bet on it.
3. Don't burn the bridge: Chris Pirillo rejects Microsoft Just a few months ago, the already-successful tech pundit Chris Pirillo eyed Microsoft as an employer. After some interviews, Microsoft made an offer to the former Tech TV host. Their price was too low, but the affair ended amicably — Microsoft is still the major sponsor at Chris's annual tech conference, Gnomedex.

Spend all that new money, of course. While the amount that True Ventures gave Om is undisclosed (for now), one source says it's "enough to hold him over for a couple of years."

Usually, that's what ad income is for. And it's unclear just how Om's ad provider, Federated Media Publishing, feels about not being able to pay Om's bills.

Especially since Om took venture capital. As any startup burnout can tell you, VCs often want two to five times their investment back. That's hard to do with a content-based site (which is why Jason Calacanis and Nick Denton funded their blog networks with their personal fortunes). It also means that in a few years, Om could feel the pressure to sell his blog. (Or, heh, go public, but let's hope the bubble pops before then.)

But who can blame him? For a Valley journalist, it's no fun to see all your friends take millions while you pull in a five-digit salary. Have fun, Om, and don't worry about the due date on that money.

It's time to transition [GigaOM]
Earlier: Scoop: Blogger Om Malik quits Business 2.0 and takes funding [Valleywag]
Photo: Om [Agendacide on Flickr]

Have you ever read the Sandman series by Neil Gaiman? VCs, we're the demon princes. The old guard, Lucifer and Beelzebub, are retiring, and the rest of us, in all our weird shapes, have our own power struggles. We're jockeying for our place in hell.

But an army of other VCs — Bill Bowes of U.S. Venture Partners, DFJ founding partner Tim Draper, Asset Management founding partner Franklin Johnson, and others — are fighting to keep univeral preschool out of the Valley. Their sticking point: the existing school system needs fixing first.

Why spend millions against the measure? (Bowes donated $500k, Draper spent $96k) Why not put that money toward the supposedly failing K-12 system? Who knows?

But the VCs have a point — these kids would all drop out of preschool anyway, to run their startups.

[Valley cash opposes preschool initiative [Mercury News]

Joe Schoendorf: [Mr. Schoendorf is a venture capitalist with Accel Partners.] ...So we have to ask ourselves, 'Who's the next Intel; who's the next Apple; who's the next Google?'

John Doerr: [Mr. Doerr is a venture capitalist with Kleiner Perkins Caufield & Byers.] If you're saying a new player is going to displace Microsoft or Google in the next five years, I just don't see it. I think Google will be the next Google.

Just so you know? Doerr was one of the VCs who took Google public.

Steve Jurvetson: [Mr. Jurvetson is a venture capitalist with Draper Fisher Jurvetson.] Will there ever be a new Google?

Doerr: I hope so, but it might not be in information. It might be in entirely new fields.

Ann Winblad: [Ms. Winblad is a venture capitalist with Hummer Winblad Venture Partners.] Who's the new Sony?

Doerr: Samsung. It's already happened. Sony bought Samsung.

(Actually it didn't. Not even metaphorically.)

Winblad: So it's not Google?

Pardon, what? How does this even make...what?

After the jump, it just gets worse.

Moderator Tony Perkins speaks up:

Perkins: But Steve Jobs has been a pioneer in user interfaces. I project that in three to five years Apple's music distribution dominance via iTunes and the iPod will have faded; it will have become the fifth or sixth player.

Doerr: Uh, wait—because, because, because?

Perkins: You can make fun of me John—

Damn, I was supposed to get permission?

—but I say this because it's a closed, proprietary system, and what my kids want is to be able to download music and share it with friends. [boring stuff removed]

Doerr: But you're projecting that Steve and the team at Apple are not going to be smart enough over time to serve that market.

Perkins: Well, unless they adjust ...

Schoendorf: You're also assuming that everybody else is going to suddenly figure out that market, but there's no sign they've even started.

Perkins: Everybody's in the business.

It's then that Jurvetson requests a show of hands to counter Tony Perkins. Tony, ever the gentleman, tells his persecutors, "Okay, we'll see. We'll invite you guys back." That's right — those MC fees make all the abuse worth it, don't they, Tony?

Gluttons for punishment can hear ZDNet's podcast of the talk.

Finding the Next Google [AlwaysOn Network]

With the posting of the millionth article about Buck's Restaurant (this time in the Seattle P.I.), the Silicon Valley pancake house is now officially in a new golden-brown age.

And the popular restaurant needs the ultimate sign of privilege: a bold-name-spotting map on par with Mediabistro's "Lunch at Michael's" feature. Yes, we need an alliteratively joyful "Breakfast at Buck's."

But Valleywag is currently, well, underrepresented in the town of Woodside, where the VCs flock from Sand Hill Road for Buck's pancakes. So Valleywag needs a weekly Buck's correspondent with a sharp eye for important people and a sharp tongue for telling who's meeting with whom. Be the reigning gossip of Woodside — e-mail tips@valleywag.com with the subject "Buck's reporter" to apply. (Link to your blog if you have one.) Because when Jurvetson orders the Spanish Omelet, you'd better pay attention.

Venture Capital: Silicon Valley's startups booming [Seattle P.I.]
Buck's of Woodside [Official site]

Good tipsters use tips@valleywag.com or keep their Gmail records clean by IMing "heyvalleywag".

CEO Trent Bigelow told USC's Daily Trojan, "It's not about creating a better Facebook, it's about changing the way we network online." His plan: integrate e-mail, messaging, and calendars into a social network so it's actually social. When he pinged Facebook founder Mark Zuckerberg with some of these ideas, Mark snubbed him.

Now Trent has a team (mostly classmates from the University of Southern California), a welcome site (in the Web 2.0 national colors of blue, pink and white), and some time for a Valleywag IM interview. Here 'tis, with the boring bits edited out.

Valleywag: Righto. So you're young. About...I'm guessing 20?
Trent Bigelow: 21 next september (sound like a kid doesn't it)
Wag: No prob, I'm 22, half the CEOs here are closer to our age than Steve Jobs's.
Get any calls from a journalist doing his requisite "30 under 30" article?
Trent: nothing published yet...have a few that are interested...amazing that a college newspaper can do this much buzz
Wag: How's the reaction been? What types of people calling you?
Trent: great so far...everything from VCs, companies (potential partners), potential hires, and even students who just want to help...everybody seems to be telling us that if we deliver what we're talking about...then we're onto something big!
Wag: And what you're talking about is "social networking that's actually social and works." [The site tagline]
Love the phrasing, by the way. A lesser man would have put "And it works too" in a separate sentence.
Trent: yeah, sounds like us...we think we can go way beyond just profiles and comments
Wag: If someone said, "But I already have Flickr and MySpace and Upcoming," how would you respond?
Trent: i'd say, "sure, but sooner or later, if another service can converge all of those features in an all-encompassing environment, that the organizations you're involved in, with much more relevant features, wouldn't you take the simplier, better experience?"

Wouldn't you? The answer — and the other four-fifths of the interview — after the jump.

Wag: No.
I'm just messing with you, that sounds great. You have calendars, an e-mail interface, profiles, groups, and photo sharing listed on your "The Idea" page. Any other major features?
Trent: the key is where the users are going — not where they are... we're working on ways to make an user exodus realistic and likely...starking with social circles...
Wag: So you're aware of MySpace's death grip on the average kid.
Trent: yeah, but...no one expects really deep tools and environments for communications, collaboration, and all other kinds of fun interactions...we're thinking of really out of the box ideas...that i don't think anyone is expecting from the other guys...
if students are willing to spend so much time on this current sites with such little to do, what will happen when we start really opening new doors? we know we'll need to partner with other content providers, ventures, and organizations to make this a reality sometime soon.
Wag: Hot stuff. Who's paying? Get any funding yet?
Trent: well, that's complicated...maybe in a few weeks we can expect a couple of "interesting" announcements... let's just say no one around here is sweating much anymore...
i'm sure everyone's heard of them...
Wag: Are we talking "This round will last for years" money, or "Okay, enough to get to round B" money?
Trent: it depends on how excited these guys get in the next few weeks...probably somewhere in between.
Wag: How'd you assemble your team? They're all still in school as well?
Trent: yeah, almost all of them are still undergraduates. Don't let their age fool you, though, they're some of the most talented and passionate people I've found yet. I networked among USC's professors, student organizations, as well as family and friends. A lot more tried out for the team, but only the best stayed. This is a good thing.
Wag: "Don't let their age fool you"? That's totally going to end up in your first New York Times profile.
Youngest team member?
Trent: youngest member, 18.
but a 16 y.o. from Boston really wants to join...he's been emailing us everyday since the DT article broke.
Wag: Brilliant! E-mailing him back?
Trent: we've made a real effort to email EVERY person back. I hope to get him and others (minors) involved in a new virtual internship program we're hoping to launch in the next year.
if you've guessed it—something that sets us a part is that we're user empowered, it's a collaborative movement that we're leading.
Wag: User-generated, Live Web, and all that jazz.
It's as if you're already in the Valley.
Trent: yeah, it's funny that many (older) analysts seem to be really impressed with the "big guys" user experience...like they've earned their users via best features...we all know that's not how they did...but that may play a big role on how they lose it...
Wag: So let's go over some things on your bio.
Trent: uh oh...
Wag: You say you talk to your furniture. What are some things you've told your furniture?
Trent: it's mostly asking them questions...why do i have to study?...why does cafeteria food suck so much...and what's going to change the global economy in an wireless-internet-everywhere environment
Wag: And this furniture, does it talk back?
Trent: no, they're all pretty lame...
Wag: So okay. Your bio says you like Coldplay. WTF, Trent?
Trent: yeah...that's about as mainstream as i get...what about Air, or Lemon Jelly? what do you like then?
Wag: You have just redeemed yourself.
Trent: whew...close one.
Wag: Let's get the bloggers to link to the interview. What are some of your favorite blogs?
Trent: steve rubel's (now), techcrunch, oriellyradar...
there are others
Wag: Has TechCrunch's Michael Arrington contacted you yet?
Trent: not....yet.... (call me, Michael....) j/k
Wag: He's totally going to call you.
Trent: we'll see... i feel special just being on valleywag...
Wag: Oh, don't — being on Valleywag halves your Q score. And probably your IQ score as well.
Trent: damnit!
Wag: Tom from MySpace has a friend-only profile for collecting hot Asian girls he's met. Will you have anything like that?
Trent: i don't about tom...but i've got a fantastic, amazing (etc) girlfriend...so, if I have a special profile...it's just going to be for her....awww...
*(don't know about tom)
Wag: Awwwww. Just a moment, I'm throwing up a little into my desk drawer.
Trent: yeah, that's expected...
Wag: All right, when should we all keep an eye out for a Palopia launch?
Give us a ballpark range?
Trent: give us a (within) year, and we'll give you give something to talk about...
partnerships take time...we're betting a lot on them (beyond what we've already got)
Wag: Couple last things.
You have a college team, a community college team, and a high school team. What about adults?
Trent: although we want to eventually expand and help EVERYONE...we think we've got a better immediate connection to people closer to our age...(for the time being)...we'll see...i think we should focus on our core for the launch...
Wag: Groovy. So before you crush them beneath your friendly pastel-blue army boot, what do you want to tell MySpace, Facebook, and all the other social networks?
Trent: apologies in advance...for actually caring about the user experience and their safety.... also, reminder... it's about relevant partnerships, the power of the brand, and making a member movement...
Wag: Cool. Last question: Who on the team is single? Cause a couple of you drop the girlfriend bomb on your bios, and that's just a letdown to all the other tech kids.
Trent: i think maybe we could help form some new relationships for even the most tech savvy kids out there...
you never know how much palopia will help.
Wag: So could someone on this team hook up with a hottie on their own site?
Web 2.0 is the ultimate aphrodisiac.
Trent: absolutely....

The man who tried to buy Facebook [USC Daily Trojan]
Palopia [Official site]

Friendster isn't Siegelman's first hot product. At Microsoft in the 90s, he was employee #1 of the MSN division (which, granted, is already dying a decade later). Then he launched the snappy magazine Slate (which was hemorraging money until its sale to the Washington Post).

So if our source is right, the burnout master will be off Friendster's board and job-hunting soon. Watch for him moving into biotech, energy, or mobile apps.

Bio: Team: Russell Siegelman [Kleiner Perkins]

• Apple buys land for more offices in Cupertino (having outgrown the ones pictured). I really really hope there's a giant cube involved. [Reuters]
• President Bush comes to the Valley this weekend, just in time to see his hydrogen dream dropped for ethanol. [CNET]
• Porn once again makes technological headway. But a new burnable porn CD service has DRM — get ready for a gangbang of posts from all four Boing Boing bloggers. [LAT]
• If it's called User-Generated when you let your customers do the marketing, what's it called when you let your engineers do it? [Yahoo! Cool Thing of the Day]
• That's right, VCs — the money you spent on someone's mash-up went down the big non-patentable drain. [CNET]
• Google breaks down and partners with all the unsexy enterprise companies. [Google OneBox]
• AOL's Jason Calacanis and Jupiter Media CEO Alan Meckler debate: Can bloggers make money? Sure, if you believe writers can make money. (In other words: No.) [WSJ]

If Greylock thinks Facebook is now worth about $550 mil, but that it still needs seeding to grow, it's one more sign that the social bubble still has room to inflate. Of course, it also means Facebook has that much more to pay back, and needs to hold out for higher numbers — and risk tanking like Friendster.

Oh joy, all this excitement just before a fourth of the users graduate!

Facebook Gets $25M Funding [Red Herring]
Bambi Francisco [Bambi.blogs.com]
Via: Facebook's latest valuation: "$525 million pre-money" [Lifelong Learning Blog]

• Are you going to eat all that? No? GoDaddy will take it, thanks. [Monkey Bites]
• Bridge-selling for dummies, round one— [Newswire Today]
• And round two. [Inc.]
• Yahoo to go: Soon you can use Yahoo Instant Messenger anywhere — and message your three buddies who refuse to use AIM. [TechCrunch]
• The Onion on iTunes: How is this even fiction? [Onion]
• The Onion on MySpace: Too. Fucking. Funny. [Onion]
• Local event lister Laughing Squid is giving away tickets to this weekend's DYI tech event, the Maker Faire. [Laughing Squid]

Colorado VC Brad Feld is an accomplished guy. On the board of Feedburner, NewsGator, Rally Software...ooh, he has two degrees from MIT (that's two more than most people). He's run six marathons and hopes to run every other state marathon in the next ten years. I'm gonna go out on a limb and say working all day on the "Treadputer" isn't gonna do it.

Says a friend of Valleywag, "In a movie or TV show, if there were a guy with two MIT degrees who loved to run, and read, and believed computers are his friend, and he built a Treadputer ... what would go wrong? Maybe it would be like that fly movie with that guy who always plays a buffed-out nerd. At first his wife thinks it's great — he's happy, he's buffed out, he's more, um, attentive ... but then ...."

The Treadputer [Feld Thoughts]

And from the "DNA" page of leading VC firm Sequoia Capital:

Judging by that (and more cloned bits like this from this), there are two possibilities:

1. Boom Ventures sucks.
2. Sequoia Capital has the best-disguised stealth division ever.

The Entrepreneur [Boom Ventures]
DNA [Sequoia Capital]
Earlier: Build an angel investor spam list in two minutes [Valleywag]

Six Apart raised money at a >$100m valuation. A VC I know dropped out when the pre-money passed $80m.

The tipster also mumbled something about Technorati's valuation skyrocketing, but I only want those cold, explicit numbers. Know how much a deal went for? E-mail it to tips@valleywag.com.

Earlier: Under the table: McAfee's SiteAdvisor deal

I thought venture capitalists bent over to keep their entrepreneurs happy, not the other way around.

YouTube lubed with second-round funding [CNET]

He liked it! ConFonz liked it! The jet-setting conference vet comes back refreshed from Software 2006. Here's his report, with some editorial ads to cut down on the defamation lawsuits.

Software 2006, Sand Hill's C-level conference for the decision makers in the Valley and around the world, was held at the Santa Clara Convention Center Tuesday and Wednesday. The event was a class act all the way around the block. The expo floor was more like a slick dance hall than a convention hall exhibit floor, and with all the free coffee, food, and schwag available, I sure hope I get invited to more C-level events like this!

[Alleged!] wife abuser Arjun Grupta was here to give a speech that was seemingly attended by either ass-kissing startups looking for VC, or morbidly curious Valleywag readers looking to see the man, the myth, the [alleged!] wife-punching fist. [Allegedly!] surprisingly, he didn't hit anyone during his speech.

Around the corner from Arjun's speech, the Open source panel on Tuesday threw down the gauntlet: "I believe all software companies who went into open source did it with their eyes open. Well, except for Sun." Ouch.

For the most part, the talks at the show were of the sort that any self respecting Wagger already knew about. "Leveraging Blogs, Web 2.0, and AJAX for business success?" Soooooo October 2005. But then, this stuff is probably all news to the C-levels, who spend more time slamming each other's dicks in bathroom stall doors than actually learning about their industries.

The real indication of just how well the software world is doing this year is the sheer volume of foreigners here to discuss outsourcing. Even the Indians where here to learn about how they can outsource their outsourced work to China. Soon, the Africans will be tackling the Q/A jobs even the Indians won't touch, like phone game testing.

Earlier ConFonz: ConFonz at EclipseCON: Where the wild things are [Valleywag]

April 4: Matteucci explains the investment to an eager summit crowd.

April 5: A Forrester Research member writes:

Our survey showed that only 1% of online households in North America regularly download and listen to podcasts. And when you include all of the people who are just interested or have used podcasts, they strongly favor listening to existing content like Internet radio or broadcast radio, not necessarily new content.

April 6: An anonymous member of PodTech writes:

I don't know what planet Charlene is on these days but her report on podcast adoption is way off base. I don't know why she would come out with these low numbers...I see a bright future for podcasters and podcasting.

Not that PodTech is, you know, biased.

PodTech Receives $5.5 Million in Series A Funding [PodTech]
US Venture Partners: Why PodTech? [Down the Avenue]
Forrester podcasting report - just 1% use podcasts [Charlene Li's Blog]
Forrester Report on Podcasting - Wrong Big Time [PodTech]

Stirr's mixer last night brought startuppers, marketers, and investors (and one gossip blogger) to Palo Alto's Fanny and Alexander bar for a handful of one-minute dot-com presentations and a night of drinking, demoing, and awkward schmoozing.

Demo-ers included:
Sean Savage of cafe-driven PlaceSite
Vinnie Lauria (who — ladies — is new in town and hot as hell) of social IM service Meetro
Andrew Martinez-Fonts (thanks for the ride, Andrew) of p2p-loan site Prosper
Adam Siegel of Inkling Markets (the wisdom of the bookies)
Scott Johnson of Ookles — I wasn't listening by this point. Sorry, Ookles.

The main event was the three-hour laid-back schmooze session. Beer was $4.50, and hard liquor could be had for three bucks. This, the 6-to-9 timing, and the lack of free food meant a roomful of drunk dot-commers.

Meanwhile, on the deck out back, a club of young VCs ("Future Partners" of something or other — young bucks freshly post- or pre-business school) held a session out back — with food! — that was quickly invaded by startups hungry for kebabs and Round A funding.

Photo: The Stirrers [Philosophy Geek on Flickr]

"Old girls"? Let's see, SiliconBeat mentions two Valley women. According to the Internets, their ages are:

Jennifer Fonstad (pictured): 39 or 40
Amy Vernetti: 38

You guys are so in the doghouse.

Old Boy Network? Forget it. Try the Old Girl Network [SiliconBeat]

Hanlon and Gupta authorized the replacement of Christopher Cannon with Hanlon as Gupta's attorney. It's still unclear when the trial will be held, or how soon someone will try to write a joke about it. After the jump, the attorney substitution form.

Local hero #3: Stuart Hanlon [Best of the Bay]
Earlier: VC Arjun Gupta arrested, charged with domestic violence

img src="http://www.valleywag.com/images/2006/03/ag-7%20%28Custom%29.jpg" />

Earlier this month, Private Equity Week reported the story as a blind item. According to the item, Gupta (name withheld at the time) was "arrested at his office, handcuffed and marched out past his colleagues."

A misdemeanor complaint filed in the San Francisco County Superior Court lists three violations of California law, all concerning an incident in which Gupta allegedly abused his wife on February 2. Below is the complaint.

After the jump, larger copies of the complaint and the protective order filed against Gupta.

Earlier: Blind item: Big-time VC head accused of wife-beating [Valleywag]

Some gentle value-building seems fine, but a nine-item "Why we're better" chart? If you kids don't stop fighting, Benchmark will turn this fund right around...

Zopa vs. Prosper [alarm:clock]

Startup founder Christian Cabot tells the Seattle P-I:

"We believe Tableau is the next billion-dollar company from Seattle," said the former venture capitalist and Stanford grad. "We believe it, like we believe anything."

Don't worry, it's a trick statement. Venture capitalists don't believe in anything.

Venture Capital: Tableau Software is thinking very big [Seattle P-I]

Almost forty percent of surveyed startuppers ("start-uppers" but best pronounced "star-tuppers") didn't feel bullish, didn't feel bearish, and felt more like a cup of coffee and a bagel, please.
Most startuppers felt bullish, but even more felt the other startuppers felt bullish, from which we can extrapolate that almost all startuppers think that other startuppers think the other other startuppers feel bullish. Or to paraphrase, they think they think they think the market's rising.
The number of VCs less hot than George Zachary outnumber the VCs hotter than George Zachary 14 to 1.
Leapfrog's logo doesn't scale well.
The three co-founding Leapfrog directors have a combined 35 years of "successful venture investment" and 40 years of "operating experience," which doesn't mean that someone had a shitty five years, but it's fun to assume that anyway.
Six months is now a benchmark era for measurable progress, by which standards Google is made of poor people.
A venture capital firm asking capital-seeking startuppers whether the money's flowing will not get biased answers at all.

Survey of Silicon Valley Entrepreneurs Reveals Increased Confidence in Startup Venture Landscape [Business Wire]