PE Week Wire — Friday, October 29

Get The Wire in your inbox each morning! Just send us an email.

 

Friday Feedback

The sky is gray, some Iraqi HMX is missing and Curt Schilling is the most popular Bush supporter in Massachusetts. In other words, it’s time for some Friday Feedback.

First up are responses to Tuesday’s column about Q3 venture capital disbursements, which were down over 26% from the previous quarter. VC Jim writes: “I was really surprised when I first saw the numbers, because we were so busy during the summer that some of us put off planned vacations. But the more I think about it, we didn’t actually do many deals, we just looked at a lot of them.” Robert adds: “From conversations with my venture buddies (I used to be one), deal-flow died in July and August, picked up in September and fell off again in October.”

Every time I discuss disbursement data, someone writes in to say that journalists pay attention to the wrong set of numbers. This quarter, it was Steve: “What is preposterous in the idea that the venture industry can sustain annual investment rates of $20 billion, or even $15 billion. Why don’t the pundits focus on the amount of capital return to LPs?” Good question Steve, although it’s worth noting that this space does discuss performance data at least once a quarter. As for why disbursements get more play, it’s probably for two reasons. First, it is easier to quantify. Second, it is an indicator of what the market is doing today, whereas cash returned to LPs really is an indicator of investments made three, five or even ten years ago. Neither of those reasons excuse punditry misdirection (yours truly included), but they do explain it.

Lots of emails, of course, about the Red Sox, and yesterday’s coffee shop anecdote (which also happens to have been reprinted on the front of today’s Boston Globe). It always amazes me when something like a sporting even in St. Louis can generate such emotion in far-flung places like China and Australia. Thank you, again, for all of your notes and stories – particularly from those of you who, like me, live and/or grew up in the Metro West region of Massachusetts. They are going into a special email folder that I plan to never erase.

Finally, the vast majority of reader responses this week came in the form of Presidential Poll participation. After the results were published Wednesday, Alex wrote in to ask about the 25 write-in ballots. Per your request, seven of them went to Libertarian Party candidate Michael Badnarik, while others went to folks like Jesse Ventura, Joe Biden, Rudy Giuliani and, yes, Curt Schilling. Also coming in after the poll results were some particularly colorful emails from Bush supporters. Among my favorites was one from St. Louis Cardinals fan James: “Scr*w you, John Kerry, the Red Sox and your whole elitist group. The Cardinals played like cr*p for whatever reason, but hopefully we normal people will beat your a** in the election and prevent you immoral, baby-killing snobs from ruining the country.”

And with that, have a great weekend…

U.S. Venture Partners has almost finished fund-raising for its $600 million ninth fund, with a final close expected to occur within the next week (perhaps as early as today). The firm’s previous effort raised $1.01 billion in early 2001, but was later trimmed to $750 million. www.usvp.com

Zappos.com Inc., a Las Vegas-based seller of shoes and handbags via the Internet, has raised $20 million in venture capital funding from Sequoia Capital, with Sequoia partner Mike Moritz joining the board of directors. The company also announced that it has increased its revolving credit line with Wells Fargo Business Credit to $40 million. The company previously had raised a small amount of VC funding from Draper Richards and Venture Frogs. www.zappos.com

U.S. Shipping LP, an Edison, N.J.-based provider of long-haul marine transportation services, will begin trading on the NYSE under ticker symbol USS. The company priced 6 million common units at $22.25 per unit (top of its offering range), for a total IPO take of approximately $133.5 million. U.S. shipping was formed in 2002 by Sterling Investment Partners, following its $198 million acquisition of six Jones Act tankers from Amerada Hess Corp.

PrimeRevenue Inc., an Atlanta-based provider of financial supply chain solutions, has raised $12 million in Series A funding. Battery Ventures led the deal, and was joined by eRevenue. Roger Lee, a partner with Battery, has joined the PrimeRevenue board in conjunction with the financing. www.primerevenue.com

ProStrakan Group Ltd., a UK-based drug company formed after the merger of ProSkelia and Strakan, has raised GBP 22 million (approx. $40.3 million) in venture capital funding. The deal was led by existing Strakan investors 3i Group, LMS and Innoven Partenaires, with new investor Quest for Growth also participating. www.strakan.com

Linden Lab Inc., a San Francisco-based creator of 3D entertainment products, has raised $8 million in new venture capital funding. Benchmark Capital led the deal, and was joined by Omidyar Network, a new group led by eBay founder Pierre Omidyar. Return backers like Mitch Kapor also participated. www.lindenlab.com

T3Ci Inc., a Mountain View, Calif.-based RFID analytics and applications company, has raised $9.4 million in Series A funding. Investors included Venrock Associates, Red Rock Ventures, SAP Ventures and company founders. www.t3ci.com

Windsor Jewelers, an Augusta, Ga.-based single-location jewelry retailer, has received an undisclosed amount of private equity funding from Alpine Investors. www.alpine-investors.com

UltraShape Inc., an Israel-based medical device company focused on non-invasive body contouring, has raised $6 million in third-round funding from Israel Seed Partners. www.ultrashape.com

Med-Shred Inc., a Houston, Texas-based provider of medical waste treatment services, has raised $7 million in Series B funding. Murphree Venture Partners led the deal, and was joined by Chrysalis Ventures, Cogene Ventures, Erasmas Louisiana Growth Fund and individual investors. www.medshred.com

Sentinel Capital Partners has sold portfolio company Floral Plant Growers LLC to Blue Point Capital and members of the company management team. No financial terms were disclosed. Floral Plant Growers is a Denmark, Wis.-based provider of floricultural products to mass-merchant retailers.

Celanese AG, a German chemicals company owned by an affiliate fund of the Blackstone Group, has agreed to acquire Canadian acetyl products maker Acetex Corp. (TSE: ACX) for approximately Cdn$600 million (approx. US$492 million). The deal is expected to close early next year. www.acetex.com

Google Inc. (Nasdaq: GOOG) has acquired Keyhole Inc., a Mountain View, Calif.-based digital mapping company. No financial terms were disclosed. Keyhole had raised venture capital funding from 550 Digital Media Ventures, Intrinsic Graphics Inc. and In-Q-Tel, the venture capital affiliate of the CIA. www.keyhole.com

OfficeTiger Inc., a New York-based provider of business process outsourcing solutions, has acquired the Devonshire Group, a UK-based provider of outsourced creative, document and staffing solutions to professional services firms in the UK and Continental Europe. No financial terms were disclosed. OfficeTiger is a portfolio company of private equity firm Francisco Partners. www.officetiger.com

PRA International, a McLean, Va.-based contract research organization, has set its IPO terms to six million common shares being offered at between $16 and $18 per share. The company is majority-owned by Genstar Capital, with other significant shareholders including Caisse de depot et Placement du Quebec, BNP Paribas and Toronto Dominion Bank. www.prainternational.com

Digital Realty Trust Inc., a Menlo Park, Calif.-based company that acquires, repositions and manages technology-related real estate, will begin trading on the NYSE under ticker symbol DLR. The company priced 20 million common shares at $12 per share (below its $14-$16 offering range), for a total IPO take of approximately $240 million. Digital Realty was majority-owned by private equity firm Global Innovation Partners. www.digitalrealty.net

UAP Holding Corp., a Greeley, Colo.-based distributor of agricultural and non-crop products in the U.S. and Canada, has set its IPO terms to approximately 23.44 million common shares being offered at between $15 and $17 per share. Apollo Management acquired the company from ConAgra Foods Inc. (NYSE: CAG) last November for around $550 million in cash, and another $60 million in preferred securities. www.uap.com

Yellow Pages Singapore Ltd. is planning to raise around S$240 million (approx. US$144 million) via an IPO next month. The company was acquired last year by CVC Asia Pacific and JPMorgan Partners.

GE Commercial Finance has hired Edward Ribaudo and Erica Frontiero as a senior vice president and a assistant vice president, respectively, in the firm’s capital markets group. Ribaudo previously served as a director of loan sales and trading with Scotia Capital, while Frontiero was an account executive withy the Telemundo Group, NBC Universal.

  Thursday, October 28

Of Banks and Baseball

Mellon Financial Corp. (NYSE: MEL) announced yesterday that its private wealth management group has held a third, and final, close on its fourth private equity fund. The vehicle is capped at $56.4 million, and will serve as a fund-of-funds that allows rich Mellon clients to participate in private equity and venture capital funds. “We view diversification into private equity and venture capital as a key part of our portfolio management process,” said Nick Vidnovic, manager of private equity for the private wealth management group, in a press release. “This asset class historically has provided attractive rates of return and provides good diversification to complement our clients’ holdings in equities, fixed income and other alternative investment vehicles.”

I agree with what Nick said, but it’s fairly obvious that others in the Mellon superstructure do not. Just last month, the bank announced that its venture capital unit – which invested both in companies and funds – would no longer be making any new investments. Moreover, it opted to not let its managers spin out into a new firm or to sell its existing assets on the secondary market, although I hear they may be softening on that last point.

Sure, some of the senior managers will stick around thanks to some very “generous” compensation packages, but how does Mellon reconcile its dual beliefs that private equity is good diversification for client assets, but not for bank assets? Which is the goose, and which is the gander? Mike Dunn, a Mellon spokesman, told me this morning that he does not think the contradiction exists, because the VC business “never developed large enough to become a core business for Mellon.” It’s worth noting, however, that Mellon is estimated to have sunk around $1.4 billion into the Mellon Ventures effort. How much more money was needed to it to become a core business? It also is worth noting, in the spirit of full disclosure, that I own a bunch of Mellon stock. Normally that would bother me, but nothing can bother me today. That brings me to…

Over the past ten hours, a ridiculous number of you have written in to congratulate me for the Red sox victory (too bad I didn’t make the playoff roster). Much thanks. For those outside New England who can’t understand the emotional significance, please indulge me the following tale: Earlier this morning, I went to grab a bagel and coffee at my regular haunt in Framingham, Mass. (western suburb of Boston). As I waited in line, an older man walked up to a woman who was reading The Boston Globe. He asked her if he could see the front page, because all of the newsstands in the area were already sold out. She offered him the entire paper, but he gently said that he just needed to see the cover. She showed it to him and he started to cry. Grown man in the middle of a coffee shop on an October morning. Cynicism has finally taken a holiday.

 

Volumetrics Medical Imaging Inc., a defunct medical device company based in Durham, N.C., has settled its long-running lawsuit with Philips Medical Systems, a subsidiary of Royal Philips Electronics NV. The suit stems from Philips Medical’s 2001 decision not to acquire Volumetrics, even though it already had an agreement in place to do so. Volumetrics argued in court that the change of plan caused Volumetrics to essentially perform as a division of Philips Medical for 10 months, during which time proprietary information was shared. A court last year ruled that Volumetrics was entitled to a total of $318.75 million plus interest, but the company opted to settle following an appeal by Philips Medical. Volumetrics had received venture capital funding from Kitty Hawk Capital, Allen & Co., Aurora Funds and the TriState Investment Group.

Ignition Partners, a Bellevue, Wash.-based venture capital firm focused on software and communication technology, has closed its third fund with $300 million in limited partner commitments. Investors included both Stanford University and Harvard University. www.ignitionpartners.com

Build-A-Bear Workshop Inc., a St. Louis-based provider of “make your own stuffed animal” retail experiences, will begin trading on the NYSE under ticker symbol BBW. The company priced 7.482 million common shares at $20 per share, for a total IPO take of approximately $149.64 million. Build-A-Bear originally filed to price 6.8 million shares at $16-$18 per share, but later raised its offering range to $18-$20 per share. The company has raised over $20 million in VC funding, with significant shareholders including Kansas City Equity Partners, Catterton Partners and Walnut Capital Partners. www.buildabear.com

Chromatin Inc., a Chicago-based developer of technology to incorporate entire chromosomes into plant cells, has raised $7.3 million in Series B funding. New investors included Illinois Ventures, Unilever Technology Ventures and the National Corn Growers Association, while return backers Burrill & Co., Venture Investors and Foragen also participated. www.chromatin.com

Panorama Software Inc., a Toronto-based provider of business intelligence solutions for the Microsoft platform, has raised an undisclosed amount of VC funding from JMI Equity, Intel Capital and Platinum Neurone Ventures. www.panorama.com

3DM Inc., a Cambridge, Mass.-based developer of synthetic biomaterials, has raised $1.7 million in first-round VC funding led by Technology Directors Inc. www.macbio.com

Asknet AG, a Germany-based provider of outsourced electronic software sales and distribution services, has raised an undisclosed amount of VC funding from firms that include AdAstra. The company now has raised over $15 million in total VC funding. www.asknet.com

Comverge Inc., an East Hanover, N.J.-based provider of power management solutions for electric utilities, has raised $13.6 million in Series B funding. Rockport Capital Partners led the deal, and was joined by return backers Nth Power, EnerTech Capital Partners, NorskHydro Ventures, and Ridgewood Capital. www.comverge.com

Excel Energy Technologies Ltd., a Tulsa, Okla.-based provider of energy management solutions, has raised $5 million in a VC funding round led by Natural Gas Partners. www.excel-energy.com

Nautic Partners will try to sell its position in movie theater chain Muvico Holding LLC, according to Dow Jones. www.muvico.com

Celanese AG, a German chemicals company owned by an affiliate fund of the Blackstone Group, has agreed to acquire Canadian acetyl products maker Acetex Corp. (TSE: ACX) for approximately Cdn$600 million (approx. US$492 million). The deal is expected to close early next year. www.acetex.com

Google Inc. (Nasdaq: GOOG) has acquired Keyhole Inc., a Mountain View, Calif.-based digital mapping company. No financial terms were disclosed. Keyhole had raised venture capital funding from 550 Digital Media Ventures, Intrinsic Graphics Inc. and In-Q-Tel, the venture capital affiliate of the CIA. www.keyhole.com

OfficeTiger Inc., a New York-based provider of business process outsourcing solutions, has acquired the Devonshire Group, a UK-based provider of outsourced creative, document and staffing solutions to professional services firms in the UK and Continental Europe. No financial terms were disclosed. OfficeTiger is a portfolio company of private equity firm Francisco Partners. www.officetiger.com

Fox Hollow Technologies Inc., a Redwood City, Calif.-based medical device company focused on peripheral artery disease, will begin trading on the Nasdaq under the ticker symbol FOXH. The company priced 4.5 million common shares at $14 per share (top of $12-$14 offering range), for a total IPO take of approximately $63 million. The company had raised approximately $60 million in total VC funding from significant shareholders like De Novo Ventures and New Enterprise Associates. www.foxhollowtech.com

DreamWorks Animation SKG Inc., a Glendale, Calif.-based developer of computer-generated animation films, will begin trading on the NYSE under ticker symbol DWA. The company priced 29 million common shares at $28 per share, for a total IPO take of approximately $812 million. The company lists Vulcan, the private equity investment arm of Paul Allan, among its shareholders (as part of an original Vulcan investment in DreamWorks SKG, from which DreamWorks Animation was spun out). www.dreamworks.com

ELong Inc., a Beijing, China-based provider of online travel services, will begin trading on the Nasdaq under ticker symbol LONG. The company priced over 4.6 million American depository shares (ADS) at $13.50 per ADS, for a total IPO take of approximately $62.1 million. Significant shareholders include IAC/InteractiveCorp, Tiger Technology Private Investment Partners, Billable Development Ltd. and Blue Ridge Capital. www.elong.net

Frederic Malek has given up his managing partner title with Thayer Capital Partners, according to The Washington Post. Malek founded Thayer in 1991, and now will serve as its chairman. Day-to-day operations will be overseen by a trio of managing partners: Daniel Dickinson, Scott Reud and Jeffrey Goettman. www.thayercapital.com

Suzanne MacCormack will become a partner with Ampersand Ventures, effective January 1, 2005. She currently serves as executive vice president and chief financial officer of Moldflow Corp. (Nasdaq: MFLO), and will continue her Moldflow responsibilities through year-end. www.ampersandventures.com

Weil, Gotshal & Manges LLP has added five attorneys to its capital markets, banking and finance practice group in Hungary. They are: Laszlo Nagy, corporate transactions and capital markets; Kinga Szabo, corporate transactions; David Fink, capital markets and finance transactions; Istvan Gere, banking and finance transactions; and Gabor Szabo, capital markets and finance transactions. www.weil.com

The Caisse de depot et placement duQuebec has decided to outsource its direct venture capital investment activities. Management of the group’s international private equity investments has been granted to VantagePoint Venture Partners of San Bruno, Calif., SAM Private Equity of Zurich and AXA Private Equity of Paris. Caisse – which currently has approximately Cdn$1 billion dedicated to private equity – also plans to increase its exposure to Quebec-based venture capital firms. www.lacaisse.com

The Emerging Markets Private Equity Association announced its formation, as an international group serving private equity and venture capital firms operating in Asia, Latin America, Africa, Eastern Europe and the Middle East. Sarah Alexander, former senior investment officer for the $5.7 billion Emerging Markets Partnership, has been named chief executive. Previously, Alexander had worked on international economic policy at both the World Bank and at the U.S. State Department. www.empea.net

European Venture Partners has closed its latest venture leasing fund with GBP 105 million in limited partner commitments. www.evp.co.uk

  Wednesday, October 27

Presidential Poll: Readers Pick Kerry

Thank you to everyone who participated in our third, and final, Presidential Poll. The results are unscientific, but represent a significant departure from our first two efforts, which were statistical dead-heats. Without further ado or unnecessary punditry.

Who do you plan to vote for on Election Day?

1.      George W. Bush: 46.2% (929)

2.      John Kerry: 52% (1,045)

3.      Ralph Nader: 0.6% (11)

4.      Other: 1.2% (25)

What is you political affiliation?

1.      Registered Republican: 34.9% (701)

2.      Registered Democrat: 22.2% (447)

3.      Independent, but with Republican tendencies: 17.2% (345)

4.      Independent, but with Democratic tendencies: 14.8% (298)

5.      Independent without leanings: 192 (9.6%)

6.      Other: 1.3% (26)

What is the single most important factor in determining your vote?

1.      Candidate’s personality: 9.6% (189)

2.      Economy: 28.5% (558)

3.      Environment: 1.2% (23)

4.      Healthcare: 0.8% (17)

5.      Homeland security: 16.8% (329)

6.      Medical research: 0.6% (11)

7.      War in Iraq: 22.5% (441)

8.      Other: 20% (393)

Did the televised debates sway your vote?

1.      Yes, toward Bush: 4.2% (84)

2.      Yes, toward Kerry: 18.1% (364)

3.      No change: 72.6% (1,457)

4.      Not applicable/didn’t watch: 5% (101)

Have you changed your presidnetial preference in the past two months (from one candidate to another, not from undecided to a candidate)?

1.      Yes: 6.3% (127)

2.      No: 93.7% (1,867)

The preceding poll was conducted on October 25-26, and included 2,010 respondents.  

Warner Chilcott PLC (Nasdaq: WCRX), a UK-based specialty pharmaceutical company focused on women’s health and dermatology, has agreed to be acquired for $2.9 billion by JPMorgan Partners and DLJ Merchant Banking Partners. Holders of the company’s American depository shares (ADS) will receive $63.33 in cash per outstanding share. It still is possible that another bidder could challenge the agreed-upon deal, with both Goldman Sachs and Bain Capital rumored to be interested. www.warnerchilcott.com

China Netcom Corp., a Beijing-based fixed-line telecom provider in China and data communications operator throughout Asia, reportedly has begun marketing its $1.2 billion IPO. In February 2001, Goldman Sachs and News Corp. (NYSE: NWSA) invested $325 million into China Netcom for a 12% ownership position. www.cnc.net.cn

The Securities and Exchange Commission yesterday voted to regulate hedge funds, although most industry observers believe that the effect on private equity firms is, for now, minimal. More on this story tomorrow.

Pharmasset Inc., a Tucker, Ga.-based developer of antiviral drugs, has received a $4 million investment from the Roche Venture Fund, the venture capital arm of Hoffmann-La Roche Inc. The deal also includes warrants that would allow Roche Venture Fund to purchase another $6 million worth of shares within the next two years.In related news, Pharmasset and Hoffmann-La Roche have signed a strategic partnership agreement that could end up being worth $168 million. www.pharmasset.com www.roche.com

A4Vision Inc., a Cupertino, Calif.-based provider of identification software and 3D facial imaging technologies, has raised $4.8 million in new Series B funding. Investors included TAKO Ventures, FusionTech, NTT Leasing Co. and Stanford University. The company now has raised a total of $17.6 million in Series B funding, and $23.3 million overall. www.a4vision.com

Netblue Inc., a Mountain View, Calif.-based online direct marketing company, has raised $20 million in Series A funding from Oak Investment Partners. The announcement came today, but the deal actually closed back in April. www.netblue.com

Networks In Motion Inc., an Irvine, Calif.-based provider of wireless software solutions for mobile workforce management and location-based services, has raised $5 million in Series B funding. Redpoint Ventures and Mission Ventures participated on the deal. www.networksinmotion.com

Clear2Pay NV, a Brussels-based provider of payment software solutions for financial institutions, has raised Euro 6.1 million in new venture capital funding. Investors included Quest for Growth, Technology Venture Partners, Koceram and company management. www.clear2pay.com

Interface Biologics Inc., a Toronto-based medical device maker focused on controlled drug delivery and tissue engineering applications, has raised Cdn$10 million in new venture capital funding. VenGrowth Capital Partners and the Business Development Bank of Canada co-led the deal, and were joined by Genesys Capital Partners. www.interfacebiologics.com

Afferent Corp., a Providence, R.I.-based medical device company focused on chronic neurologic dysfunction, has raised $4 million in Series A funding. New Sciences Ventures led the deal, and was joined by fellow new investors Point Judith Capital Partners, Long River Ventures, Village Ventures and Nitta Corp. Return backers included Boston University, Slater Center for Biomedical Technology and Pharos LLC. Afferent also was the recent recipient of more than $2.2 million in NIH research grants. www.afferentcorp.com

Centice Corp., a Research Triangle Park, N.C.-based developer of computational “smart” sensor technology, has raised $3 million in Series A funding. Investors included The Aurora Group and Novak Biddle Venture Partners. www.centice.com

Innov-X Systems Inc., a Woburn, Mass.-based maker of handheld elemental analyzers, has raised $2.2 million in new private funding. Rand Capital and CEI Ventures participated in a subordinated term note tranche, while Key Bank participated as a senior lender. www.innov-xsys.com

Opticality Corp., a Research Triangle Park, N.C.-based supplier of glasses-free 3d-enabled display screens, has raised $10 million in Series A funding from the MCT Global Opportunities Fund. www.opticalitycorporation.com

Vocera Communications Inc., a Cupertino, Calif.-based provider of wireless voice communications solutions, has raised $6 million in new private equity funding from Thomas Weisel Venture Partners. The company now has raised $37.3 million in total private funding since its March 2000 inception. www.vocera.com

ClearWire Corp., a Kirkland, Wash.-based WiMax company, has received an undisclosed amount of strategic funding from Intel Capital. The company previously had raised $160 million in Series A funding in August from unnamed investors. www.clearwire.com

Gale Force Energy Ltd., a Toronto-based renewable energy company, has received $3 million in private equity funding from Romspen Investment Corp. www.galeforceenergy.com

JLL Partners has acquired C.H.I. Overhead Doors, an Arthur, Ill.-based maker of overhead garage doors. No financial terms were disclosed. www.chiohd.com

Bravo Sports, a Cypress, Calif.-based maker of products for the skateboard and in-line skating markets, has acquired Variflex Inc. (Nasdaq SC: VARIFLEX), a Moorpark, Calif.-based provider of recreational consumer products. The deal is valued at $7.60 per outstanding Variflex share, or $ million total. Bravo Sports is controlled by private equity firm Centre Partners. www.variflex.com

PortalPlayer Inc., a Santa Clara, Calif.-based fabless semiconductor company for manufacturers of personal media players, has set its IPO terms to 6.25 million common shares being offered at between $11 and $13 per share. The company has raised $80 million in VC funding since its 1999 inception, including a $42 million recap round in 2002. Significant shareholders include JPMorgan Partners, Shamrock Holdings, Investcorp, CIBC World Markets and LSI Logic Corp. www.portalplayer.com

OptionsXpress Holdings Inc., a Chicago-based provider of an online retail brokerage platform, has filed to raise $150 million via an IPO of common stock on the Nasdaq under proposed ticker symbol OXPS. The company’s largest shareholder is Summit Partners, which led an $88.4 million recapitalization earlier this year. www.optionsxpress.com

Build-A-Bear Workshop Inc., a St. Louis-based provider of “make your own stuffed animal” retail experiences, has amended its IPO terms. The company previously had filed to price 6.8 million common shares at $16-$18 per share, but now has revised the range upward to $18-$20 per share. Build-A-Bear has raised over $20 million in VC funding, with significant shareholders including Kansas City Equity Partners, Catterton Partners and Walnut Capital Partners. www.buildabear.com

Copano Energy LLC, a Houston-based midstream energy company, has set its IPO terms to 5 million common units being offered at $19-$21 per unit. The company was bought out in 2001 by DLJ Merchant Banking Partners and EnCap Investments, which currently hold a combined 59.4% ownership stake. www.copanoenergy.com

Woodforest Financial Group Inc. and Lindows Inc. both withdrew registration papers for proposed IPOs. Neither company had received private equity funding.

David Connell will step down from his executive chairmanship position with TTP Venture Managers on November 15. He had served as the UK-based firm’s chief executive from its 1998 formation until 2002, when Gerry Fitzsimmons took over and Connell became executive chairman. www.ttpventures.com

Christoph Schroder will joined Techno Venture Management as an entrepreneur-in-residence and senior advisor, effective November 1. He previously served as a partner with JSB Partners, a trans-Atlantic investment banking and advisory firm in the life sciences industry. www.tvmvc.com

Infineon Technologies AG (NYSE: IFX) has decided to shut down its Infineon Ventures group. As first reported in The Deal, the eight-year-old unit will discontinue all investment activities, and look to sell off its existing portfolio of 35 companies. www.infineonventures.com

Austin Ventures is gearing up for its ninth fundraising drive, and has set a $500 million target capitalization. www.austinventures.com

  Tuesday, October 26

 

VCs Take Q3 Vacation

A bunch of things to discuss this morning, as the St. Louis Cardinals practice hitting ground balls to first base. We begin with third quarter VC disbursement figures, which come courtesy of PricewaterhouseCoopers, Thomson Venture Economics (publisher of the PE Week Wire) and the National Venture Capital Association (collectively known as the MoneyTree Three). In short, the numbers were lousy, with just 601 U.S.-based companies raising $4.33 billion, down over 26% from the $5.87 billion raised by 794 companies in Q2. The decreases were seen across the board, with IT companies dropping from $3.8 billion for 539 companies to $2.59 billion for 394 companies; Medical and life sciences companies dropping from $1.63 billion for 171 companies to $1.32 billion for 136 companies and non-tech, non-health companies dropping from $442 million for 84 companies to $419 million for 71 companies. In fact, the only numbers that rose were post-money valuations of expans! ion-stage deals ($55 million in Q3, compared to $51 million in Q2).

The official spin is that Q3 2004 totals were equivalent to what was raised in Q3 2003, and that overall 2004 numbers should top overall 2003 numbers ($18.7 billion raised in 2003, compared to $15.3 billion and co