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Plastics Paranoia Poses VC Profit Potential

Forty-three years after Benjamin Braddock heard that “one word,” plastics is still the future.

The most promising part of the plastic future may be capitalizing on people’s fear of Bisphenol A, a binding and strengthening agent used in the manufacture of plastics. Studies have shown that the substance causes health problems, such as certain types of cancer, early-onset puberty and other health problems.

It’s difficult to say whether these studies should be believed, but doubt certainly opens up opportunities for competition. After all, BPA production is a $6 billion a year business — and both investors and entrepreneurs should see this as a big fat opportunity.

VCs Raising Africa-focused Agriculture Fund

Golden Mean Capital, a San Francisco-based venture firm, is looking to raise $30 million for its inaugural fund focused on early stage agricultural startups in Africa.

The firm is pitching U.S.-based and Canadian large family offices to raise the fund. It has not yet held a first close and the co-founders of the firm declined to disclose details about its fund-raising effort.

Golden Mean, co-founded by former investment bankers William Silva and David Jeromin, looks to invest in startup agricultural opportunities in Africa that take advantage of native crops. Its first investment is $3 million in equity in Global Cheetah Palm Oil Ltd., a Ghana-based

Eyeing Ophthalmic Opportunities

Versant Ventures’ William Link knows eyeball tech and has been one of the few venture capitalists to aggressively invest in the space over the past decade. I caught up with Link to learn a little bit about what he’s working on. Q: Versant Ventures has been heavily involved in eye-related businesses, even though few venture […]

Q&A with Kevin Spry, A Different Kind of “Seed” Investor

I’m writing about agricultural technology for Venture Capital Journal and interviewed Kevin Spry, the founder of crop imaging company GeoG2 Solutions. A few key points are excerpted below. If you or one of your portfolio companies is involved in Ag-Bio or Ag-IT, let me know: [email protected]

Alex: Agriculture isn’t something many venture firms look at, but you’ve managed to raise $750,000 from the Halo Fund. What was that like?

Kevin: During the dotcom and even today, there’s this perception among investors that “we’re going to be able to put $50,000 into this, somebody will write a program and it will be Facebook.” When you look at a business that actually has assets, it looks unique. We built a camera system, we have some intellectual property in processing and we have a big-ass airplane. A lot of these investors have been involved in airplanes, using them, but don’t understand that they take a lot of money. I might have been better off telling them that I was going to buy a boat and go fishing.

Take a VC / PE Survey

There’s very little academic research done on the business of venture capital and private equity as little or no public data is readily available to those who would study it. That’s a problem that forces folks to rely on lobbyist-funded studies for research which come heavily biased. Take a few minutes to help out Pepperdine’s Graziadio School of Business complete its annual Private Capital Markets Study by clicking on this link.

The questions don’t have as much as I might like on venture capital, but it’s a solid start and I applaud the school’s work to bring these resources together. Last year’s survey results are available after the jump…

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Dear VCs, You Were Wrong

At the end of September 2008, we surveyed venture capitalists about what the financial crisis would ultimately mean to their business. Just to put that moment of history into context, it was about a week after Lehman Brothers declared bankruptcy and about three weeks before Sequoia Capital gave its “RIP Good Times” presentation.

In short, the predictions were juuuust a bit outside.

New Book Demystifies the Cloud

I have avoided that whole “cloud” computing thing as a topic of research, reporting and reading, writing it off as little more than yet-another hyped-up Silicon Valley meme.

But a new book out in May by Charles Babcock pokes through the fuzziness of “the cloud” to bring back some real actionable intelligence.

No book about databases and computer processing is going to be fun, yet Babcock, an editor at InformationWeek, does an admirable job of making the thing readable. How well I relate to the hypothetical executive he describes:

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Skype, Dodgeball and Other Acquisition Disasters

It’s common knowledge in academic circles that acquisitions seldom provide the benefits that acquirers initially expect. Most researchers blame this on a principal-agent problem, where executive incentives diverge from shareholder interests.

That can take two major forms: The first is executives awarding themselves major bonuses for making deals go through. The second is manager demand for higher salaries that come with larger fiefdoms and more cubicle serfs.

But there’s another school of thought blames executive hubris for synergy disappointments. The theory is that executives systematically over-estimate their ability to unlock the potential of corporate assets. They believe that they are superior managers than the schmoes running the acquisition target. Call it a crime of excessive self-esteem.

Yet deals keep getting done.

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Sex Toy Maker JimmyJane Raises $2M

Sex toy maker JimmyJane raised $2 million from a group of investors in its Series E round, according to a new regulatory filing. This brings the company’s total to $8.3 million.

JimmyJane, a startup looking to become the Montblanc of vibrating sex toys, has raised money from investors such as technology hedge fund Palo Alto Investors and a limited liability company controlled by venture capitalist Tim Draper, documents show.

Since its initial institutional financing round, the company has launched several new products. Its original line of high-end toys were pricey, starting at $175 and ranging up to $3,250 for its diamond-studded platinum vibrator. It has since added several down-market offerings, such as a the $90 “Iconic Rabbit” and a $36 vibrating ring.

VCs: Time to Set Sail

Now that Larry Ellison has brought the America’s Cup back to San Francisco, it is only appropriate for the Bay Area’s elite to dust off their interest in sailing.

When the wind blows through the bay, Bill Joy may remember that he owns a sailboat and stop renting it out at 225,000 euros per week. And it’s easy to imagine Tom Perkins looking wistfully to sea from his perch in the penthouse of the Millennium Tower and thinking that he’d like to be back on the water.

There’s so much to do in advance of the season though, from remembering where that boat you bought during the dotcom boom is actually moored to pumping the bilge and scraping the hull.

Network Ubiquity To Drive Innovation

What happens when wireless networks become inexpensive, pervasive and big enough to carry serious amounts of data? You get a condition of “squanderable abundance” where innovators can play with the network and build interesting applications on top of them. When resources are scarce, utilization is low and applications are highly specialized. “What would ordinary people […]

Citibank Blocks Bank Account of Gay Social Network

This story is from freelance reporter MARTHA SANCHEZ-AVILA, who initially covered Fabulis’s financing for Reuters.com. –Alex Jason Goldberg says he has no plans to sue Citibank after the company blocked him from accessing his startup’s bank account for several days, citing a problem with the content Goldberg had posted to his startup’s blog. The repeat […]

Processing Computer Science

Computers, to my untrained mind, are things to be programmed to achieve useful tasks, such as attempting to run Microsoft software or challenging Russian grandmasters in chess. I have never fully understood the science behind computer science, even after inflicting several classes on the subject upon myself as an undergraduate. Most of what I learned […]

Few War Stories in Cleantech Compilation

Aspatore has done a difficult thing in picking essays from leading cleantech thinkers and compiling them into a single book: “Green Venture Capital.” Absent are the hucksters, ideologues and other undesirables that pollute the pages of the Internet with their mindless musings on this emerging industry. That merits praise as venture capital-related content is not Aspatore’s specialty.

The book weighs in at 97 pages and features essays from Maurice Gunderson, Michael Brown, John Ballbach, Kef Kasdin, Steve Westly and Jon Sakoda—each a respected participant in the cleantech industry. It is not designed to be read from beginning to end, but as separate white paper-style entries.

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Tesla CEO Took Private Jet to Washington D.C.

Tesla Motors CEO Elon Musk has flown his private jet to Washington at least 12 times since the beginning of last year—just months after Congress chastised the CEOs of GM, Chrysler and Ford for flying private jets to request public financing.

FAA records collected by FlightAware.com show that Musk’s jet, a Dassault Falcon 900, touched down in Washington June 15, 2009 – one week before the electric car maker won a guaranteed $465 million loan from the Department of Energy. Two weeks before that, Tesla began paying for the jet’s operating expenses. This worked out to $175,000 in costs for the final six months of 2009, according to a recent registration statement with the SEC (Tesla is planning to raise $100 million via an IPO).

Since Tesla started paying for Musk’s work-related flights, the CEO’s plane went to Washington four more times, touching down on June 15, Sept. 7, Sept. 27, Nov. 4 and once since the new year began, records show.

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The Magic of Moonshine

The idea of bespoke liquor has always been appealing to me and Max Watman’s excellent new book, “Chasing the White Dog” does much to whet my interest in the industry of homemade hooch. It’s out in February from Simon & Schuster. Watman’s combination of history and personal experiences making booze goes down easy thanks in […]

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Tesla’s Pitch to the Public: “Fund our DOE Debt”

Electric car maker Tesla Motors filed to raise $100 million from public market investors via an initial public offering Friday. Of course you already own part of Tesla Motors via the $465 million debt facility taxpayers loaned the company through the Department of Energy. And, based on the company’s financials, you’d better hope that we […]

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Yelp Helps Kill the IPO Market

Poor Yelp. The company does something (sort of) innovative and nobody notices.

While Apple was busy applying the Steve Jobs reality distortion field on tech journalists, Yelp quietly announced it had secured a Series E financing deal worth $100 million over several years.

On any other day, the announcement would have raised eyebrows for the sheer size of the investment.

But the real interesting part of the equation isn’t the size of the round. It’s the fact that the company raised only $25 million in new equity. The rest of the round is going to buying out the shares of vested employees and “other eligible shareholders.”