PE Week Wire — Friday, September 9

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Friday Feedback

The sky is gray, the Patriots are back and I’ve got to find some decent clothes for my 4th wedding anniversary dinner tonight. In other words, it’s time for Friday Feedback.

Last Friday’s column on Hurricane Katrina generated an enormous amount of response, which was mostly broken out into three categories: (1) Right on. (2) Stop Bush-bashing/being unpatriotic. (3) It is the local government’s job to protect people, not the federal government’s job. Let’s take them in order (and then get to that VC working in the Astrodome):

Right On: Joshua writes: “Prior to receiving your email this morning, I wrote my Senator to express almost the exact same sentiments. It’s shameful and embarrassing and I hope that this is a wake up call for our leaders.” Suzanne: “I have found your writing to be a beautiful blend of political savvy, great humor, dogged investigation and, at times, unbridled personal emotion. Your inclusions are pithy — right on the money. Today’s column exemplifies every reason I read PE Week.” Mayer: “I wanted to thank you for your Friday email. Words can’t describe the frustration and embarrassment that I feel watching the situation in New Orleans. Your note, however, struck a chord with its poignancy and sentiment.”

Stop Bush-Bashing: Scott writes: “I do not enjoy your frequent political rants and second guessing of decisions by our leaders in this column. I agree that the entire situation in New Orleans is a tragedy. Nonetheless, do you think that John Kerry or a Democratic president would have been able to do anything differently in the current situation? Reading your comments makes it seem like Katrina is another instance of your placing all of our country’s (even the world’s) problems on George Bush. Give me a break.” Neil: “Shame on you for spreading the word of ‘shame’ and referring to the government. I would think a capitalist like you would realize that it is not the government’s fault… It’s the people stupid. Now, why not just keep your and everyone else’s spirits up by being positive and hopeful instead of whiney and trivial.”

Dan: “With everything unfolding in New Orleans, many media types have used this as an opportunity to trash talk the president, and I am very surprised that you would get in the middle of this. A number of people in this country absolutely despise the current administration, and will try to pin any sort of bad press on them.T his is politics at its worst, you are not trying to help the situation in LA, you are slinging crap just like every other blow heart [sic] out there… There is no doubt that someone screwed up – levies aren’t strong enough, evac plan is weak, guns are not in the Walmart safe, etc. Now the government is dealing with the aftereffects – FEMA is doing what they do, the governor has the LA National Guard at his [sic] disposal. For the rest of us, it is not time to play the blame game, it is time for American solidarity – opening our wallets, our homes, etc. People are dying in New Orleans and all Sullivan can do to help them is say that it is Bush’s fault – what a patriot.”

Constitutional Argument: Vito writes: “I didn’t want to write this email because I don’t want anyone to think I am indifferent to the suffering in the Gulf Coast [but] I am writing this email because I find myself annoyed at the response and the direction of blame going on here… Look it up, the federal gov’t was made purposefully weak on domestic issues for the sake of our civil liberties. The task of running the domestic side of things falls to our governors, not our president. Look at education, crime, etc… It’s all in the hands of the states but we blame the feds… I don’t blame FEMA or Bush for what’s going in down south. I blame the governors and the mayors letting chaos happen.”

Note: Very surprised to hear this last argument. It is certainly true from a constitutional perspective, but the Founding Fathers never envisioned a Dep’t of Homeland Security, or necessarily a president whose last campaign revolved around the idea of “I’ll keep you safer than the other guy.” Again, I certainly believe that the NOLA tragedy should be pinned on ALL levels of government, including inept management by Mayor Nagin (school buses?), Gov. Blanco (coordination?) and Pres. Bush (pathetic patronage at FEMA). However, the feds asked for the greatest responsibility when they created a Dept. of Homeland Defense. You can’t ask for responsibility, receive it and then shirk it at a time of crisis.

Finally, VC Evan, who spent last Friday at the Astrodome: “What do you say to someone who has lost everything? As an early volunteer physician yesterday at the Astrodome, I wrestled with this question. Unable to help my colleagues stuck in New Orleans, the next best assistance I could provide was at the Astrodome. Nothing in my medical training prepared me for the scale of what I witnessed. While the sickest patients had been triaged by medical personnel in New Orleans and before they were processed into the Astrodome, on the floor at our medical clinic we were presented with women going into labor, patients that had not had dialysis or insulin in days, patients with infections and unknown bites from wading through the water, and enough patients with chest pain and other acute illness that we had a steady flow of ambulances nearby. I asked one pregnant lady with very swollen legs to elevate her feet with a pillow when lying on her cot. She told me she slept on the concrete the night before. After a fruitless search for a cot, I asked that she at least put a pillow under her legs, to which she replied there are not pillows either.

Another victim, an elderly man, was found incoherent and being attended to by a young boy who lived next to him in New Orleans. When asked where the family was of both victims, the boy told me that they all came together to Houston, but lost each other a day earlier within the masses of people in the arena and had not been able to find each other ever since. Even if victims were fortunate enough to arrive with family, once processed, many lost track of parents and children among the tens of thousands at the dome.

Perhaps the most difficult part of caring for the victims is the inability to treat their deeper wounds—the ones that a bandage and medications can’t repair. Many people were still stunned by the events of the prior days. I saw volunteers holding a crying older woman, consoling her in their arms. As I looked into the children’s eyes I saw their fear and sadness, images that have been seen across the nation. I watched a young mom search desperately though the piles of donated clothes for shoes for her kids—long barefoot since losing their shoes while wading through the water. All had harrowing stories of helicopters, events at the Superdome, and above all else desire to find family members—whether lost in the dome, at another shelter in the region, or still stuck in New Orleans.

Hope came later in the day with word that buses and troops were finally evacuating the rest of the city and more organized relief efforts being provided within Houston to all Hurricane victims. Perhaps some of the best medicine given was the reassurance and hope that things are going to get better. Houston is a city that struggles to meet the healthcare and social needs of the population. We have been able to build three new stadiums but have one of the highest uninsured populations in the country. I found particular irony in the fact that the stadiums have now become the homes and hospitals for so many thousands in need.

While I spend my days working as a healthcare venture capitalist on the business side of medicine, yesterday reminded me that a family physician is who I am and venture capital is just what I do.”

    Top Three


Replidyne Inc., a Louisville, Colo.-based drug company focused on anti-infectives, has raised $62.5 million in Series D funding. New backers include Duquesne Capital Management, Healthcare Investment Partners and MDS Life Sciences, while return backers include HealthCare Ventures, TPG Ventures, Morgenthaler Ventures, Perseus-Soros BioPharmaceutical Fund, Sequel Venture Partners, Temasek Holdings and Quintiles Transnational. Aquilo Partners served as exclusive placement agent for Replidyne, which has raised over $122 million in total VC funding since its 2000 inception.

Amicus Therapeutics Inc., a Cranbury, N.J.-based drug company focused on genetic diseases like Fabry disease, has raised $55 million in Series C funding. Quaker BioVentures led the deal, and was joined by Palo Alto Investors, the Garden State Life Sciences Venture Fund and return backers Canaan Partners, CHL Medical Partners, Frazier Healthcare Ventures, New Enterprise Associates, Prospect Venture Partners and Radius Ventures. The company has raised $75 million in total VC funding since its 2002 inception, including an $18 million Series B deal in May 2004 at a post-money valuation of approximately $26.5 million.

Audax Group of Boston has closed its second private equity fund with $700 million in capital commitments, and will maintain its focus on leveraged control acquisitions of middle-market companies. Returning limited partners include Harvard Management Co., Massachusetts Institute of Technology, California Public Employees’ Retirement System, Pennsylvania State Employees’ Retirement System, Commonfund Capital and FLAG Capital Management. New LPs include GIC Special Investment Pte Ltd., University of Virginia Investment Management Co., The Rockefeller Foundation and the State Retirement and Pension System of Maryland.

    VC Deals

MetaCarta Inc., a Cambridge, Mass.-based provider of geographic business intelligence solutions, has raised around $10 million in Series C funding. FA Technology Ventures and Hunt Ventures co-led the deal, and were joined by return backers Sevin Rosen Funds, Solstice Capital, In-Q-Tel, Chisholm Private Capital and ChevronTexaco. The company has raised over $17 million in total VC funding since its 1999 inception.

Allyes Information Technology Co. Ltd., a China-based provider on online marketing solutions, has raised $30 million in venture capital funding from Oak Investment Partners and IDG Technology Venture Investment, according to The Shanghai Daily.

Global Silicon Ltd., a UK-based supplier of integrated circuit solutions for consumer electronics, has raised $10 million in new venture capital funding. Quester Capital Management led the deal, and was joined by Celtic House Ventures and return backer MTI Partners. FirstCapital advised Global Silicon on the deal.

Rawflow Ltd., a UK-based provider of P2P streaming software, has raised $4 million in first-round funding from Benchmark Capital Europe. FirstCapital advised Rawflow on the deal.

OnRequest Images Inc., a Seattle-based provider of custom imagery services, has raised $8 million in second-round funding. Frazier Technology Ventures led the deal, and was joined by return backer Maveron. The company has raised $12 million in total VC funding since its 2003 inception.

NemeriX SA, a Switzerland-based provider of GPS chipsets, has raised 25 million euros in Series B funding. Oak Investment Partners and Cadence Design Systems came in as new investors, while return backers included Atila Ventures, Auriga Partners, PolyTechnos Venture Partners and VI Partners.

Permabit Inc., a Cambridge, Mass.-based provider of electronic archiving solutions, has raised $12 million in Series C funding led by return backer Baker Capital.

Quadriserv Inc., a New York-based startup provider of market data solutions to the securities lending industry, is raising $10 million in a VC funding round led by Bessemer Venture Partners, according to a regulatory filing.

Jingle Networks Inc., a Franklin, Mich.-based provider of advertising solutions, has raised $400,000 in Series A funding, according to a regulatory filing. Participants included Lead Dog Ventures and First Round Capital.

RPath Inc., a Cary, N.C.-based software company, has raised $6.4 million in Series A funding, according to a regulatory filing. Participants included North Bridge Venture Partners and General Catalyst Partners.

Bioscan Inc. of Washington, D.C. has raised $1 million in bridge financing from Brook Venture Partners. Bioscan produces detection and measurement products and automated chemistry systems used in clinical nuclear medicine and pre-clinical life science

AztecAmerica Financial Services Group Inc., a Berwyn, Ill.-based bank focused on Hispanics living in the Greater Chicago area, has closed on a $12.8 million first-round private equity infusion from unnamed backers. It soon plans to launch a second-round targeted at $25 million. Ramirez & Co. is advising AztecAmerica on both deals.

    Buyout Deals

KPS Special Situations Fund has completed its acquisition of automotive forging companies Jernberg Industries, Iron Mountain Industries and related entities. The transaction was done with U.S. Bankruptcy Court approval, and includes: $23 million of new equity, $8 million of interim financing, three collective bargaining agreements with the United Steelworkers of America, 30 customer agreements and a new $37 million senior lending facility with LaSalle Bank. The combined entities now will operate under a newly-formed company named Hephaestus Holdings Inc.

AM Media Holdings LLC, an affiliate of ACON Investments LLC, has agreed to acquire two WB-affiliated television stations from Granite Broadcasting Corp. (OTC BB: GBTVK). The total deal – which actually is two separate agreements — is valued at $180 million, including $177.5 million in cash and $2.5 million of equity in AM Media Holdings. It is expected to close next quarter. The stations being sold are KBWB in San Francisco and WDWB in Detroit.

Albertson’s Inc. (NYSE: ABS) has retained Goldman Sachs and Blackstone Group to explore strategic options that could include a sale of all, or part, of the company.

NH Hoteles SA of Spain saw its share price rise yesterday amid speculation that The Carlyle Group may be viewing the hotel chain as an acquisition target, in concert with its reported interest in Grupo Occidental Hoteles.

    PE-Backed IPOs

Horizon Lines Inc., a Charlotte, N.C. container shipping company, has set its proposed IPO terms to around 15.63 million common shares being offered at between $15 and $17 per share. It plans to trade on the NYSE under proposed ticker symbol HRZ, with Goldman Sachs and UBS serving as lead underwriters. Castle Harlan acquired Horizon Lines last July from The Carlyle Group, in a transaction valued at $663.3 million. Carlyle had taken control from CSX Corp. as part of a February 2003 recapitalization.

VistaPrint Ltd., a Bermuda-based holding company for Lexington, Mass.-based graphic design and printing services provider VistaPrint USA Inc., has set its proposed IPO terms to around 10.05 million common shares being offered at between $9 and $11 per share. It plans to trade on the Nasdaq under ticker symbol VPRT, with Goldman Sachs and Bear Stearns serving as lead underwriters. VistaPrint has raised around $76 million in total VC funding since its 1995 inception, with significant shareholders including Highland Capital Partners, HarbourVest Partners, SPEF Ventures, Sofinnova Partners and Window to Wall Street Inc.

Eutelsat SA, a France-based satellite company, is planning a public flotation by late next year that would value the company at between 2 billion euros and 3 billion euros. Shareholders include Texas Pacific Group, Spectrum Equity Investors, GS Capital Partners, Cinven abnd Eurazeo.

    PE-Backed M&A

Apprise Media LLC, a New York-based niche media company, has acquired Y-Visionary LP, an Orange, Calif.–based publisher of nine magazines focused on the automotive aftermarket, outdoor sports and shelter segments. No financial terms were disclosed. Apprise Media is backed by Spectrum Equity Investors.

JDS Uniphase Corp. (Nasdaq: JDSU) has agreed to acquire Agility Communications Inc., a Santa Barbara, Calif.–based provider of widely-tunable laser solutions for optical networks. No financial terms were disclosed for the deal, which is expected to close by year’s end. Agility has raised over $200 million in total VC funding since its 1998 inception, including a $70 million Series C infusion in 2001 at a post-money valuation of approximately $480 million, and a $91 million Series D infusion in 2002 at a post-money valuation of approximately $255 million. Shareholders include GM Capital Partners, Morgenthaler Ventures, Worldview Technology Partners, U.S. Venture Partners, Tellabs, Siemens Venture Capital, Nissho Electronics Corp., Granite Global Ventures, Meritech Capital Partners, Ciena, Alliance Select Investors, Mitsubishi and London Pacific Assurance Ltd.

    Firm News

Blue Point Capital Partners is looking to raise upwards of $500 million for its second fund, according to a regulatory filing. It’s previous fund was capped at $410 million in 2001.

Sigma Partners has closed its seventh fund with $400 million in committed capital, as first reported by VentureWire.

The Aurora Funds of Durham, N.C. has held a $50 million first close on its fifth fund, which will focus on early-stage life sciences and information technology companies. The firm also promoted Jan Bouten to the role of senior associate.

Lexington Partners is raising upwards of $3 billion for its sixth general secondaries fund, according to a regulatory filing.

Versant Ventures soon will begin raising its third fund with a $400 million target, according to VentureWire.

    Human Resources

Harvard Management Co. lost its top pick to succeed Jack Meyer as CEO, when Bain Capital managing director Mark Nunnelly opted not to take the job, according to The Boston Globe. Meyer will leave at the end of this month to launch a new asset management firm.

Jing Huang has agreed to join Bain Capital to head up a new Beijing-based operation named Bain Capital China, according to Private Equity Insider. He previously was a managing director with SAIF Ventures, which recently closed a new $630 million fund.

Paul Bialek, former CFO of RealNetworks, has joined Frazier Technology Ventures as a general partner, according to multiple press reports.

Claude Charles, former chairman of Equinox Group Holdings, and Johnson Tan, a partner with IB Capital, have joined the board of Pacific Internet Ltd. (Nasdaq: PCNTF).


The Big One

I have a biotech bias. If given the opportunity to cover one of two startups of equal financial wherewithal and innovation, I’ll typically choose the one trying to cure cancer over the one trying to speed up my Internet connection. Of course, I’ve never actually written about a company trying to cure cancer… until today.

That company is OncoMed Pharmaceuticals Inc., which yesterday announced that it had raised $13.9 million in Series A funding from Laterell Venture Partners (lead), U.S. Venture Partners, Morgenthaler Ventures and The Vertical Group. It actually secured around $18 million in Series A commitments last year, held an initial close on $5.88 million and called down about $8 million more in the past couple of weeks. But back to the matter of curing cancer…

For decades, oncologists have hypothesized that cancer contained some sort of cellular growth mechanism (a.k.a. “germ cell”), but it had never been identified until some Stanford University researchers discovered some self-renewing cells in leukemia a few years back. They called them “cancer stem cells,” because a very small number can renew indefinitely in order to create something new (albeit cancer instead of blood or an organ). This research was followed up by a pair of University of Michigan scientists who also found cancer stem cells in solid tumors, and learned that they were largely resistant to traditional chemotherapy. In other words, they figured out why someone can have breast cancer, get chemo, seem cancer-free and then have the same cancer again two years later.

OncoMed is based on the University of Michigan research, which also includes proprietary technology has helped identify that could let it identify and target the actual cancer stem cells. To date, the company has identified 50 cell surface antigens over-expressed on the cancer stem cells, and soon will begin work on both antibodies and small molecule drugs to target/kill the cells. If successful, you might literally be able to take a pill to stop the growth of breast cancer or brain cancer (with corresponding chemotherapy or surgery to remove the existing tumor). It won’t quite be like picking up some Tylenol Stomach Cancer at Walgreens, but nonetheless could be an enormous therapeutic breakthrough in oncology.

There are, however, some caveats. First, the company would likely be horrified to hear me publicly suggest that it could cure cancer (such big expectations come with that Holy Grail sort of phrase). Moreover, this is a very long-term process. An oncologist working with stem cells tells me that a best-case scenario for R&D and commercialization of such a drug would be at least five years, and that the drug would only target one type of cancer. Jim Woody, CEO of OncoMed, seems to concur, suggesting that the company’s lead candidates wouldn’t be ready to enter Phase II clinical trials for at least two years, after which there would be Phase III trials, FDA approvals, etc. And, again, this is best-case scenario, which would have to include a big pharma partner.

The main problems with such waiting are (A) Could someone else beat them to the punch; and (B) How long can VC backers afford to stick around? I’m not so concerned about A, since any big pharma very interested in this technology likely would just try to buy OncoMed. Question B, however, could be a bit dicier if the best-case scenario doesn’t work out. All of the VCs currently are gung-ho and very excited, but there obviously are huge timing risks with an early-stage drug discovery company, based on the 10-year lifecycle of most VC funds. If a fund comes up on year nine and there still isn’t a product…

Nonetheless, this may just be the most exciting company I’ve come across in five years of covering startups and the investors who love them. And, if it’s successful, it will be the most important as well.

    Top Three


News Corp. (NYSE: NWS) has agreed to acquire IGN Entertainment Inc., a Brisbane, Calif.-based provider of community-based Internet media and services for video gaming, for approximately $650 million in cash. IGN currently is in registration for a $200 million IPO, and had been a public company until it was taken private in a 2003 buyout led by Great Hill Partners. Great Hill holds a 40.3% pre-IPO stake, while other significant shareholders include Liberty Mutual Insurance Co. (23.8%) and Banc of America Capital Investors (10.3%).

Epsilon, a business unit of Alliance Data Systems Corp. (NYSE: ADS) has agreed to acquire Bigfoot Interactive Inc., a New York-based provider of email communications and marketing automation solutions, for $120 million. Bigfoot has raised over $40 million in VC funding since its 1997 inception, from firms like JPMorgan Partners, Mitsui & Co., Constellation Ventures and Hudson Venture Partners.

EBay Inc. (Nasdaq: EBAY) is in talks to acquire Luxembourg-based P2P telephony company Skype Technologies SA for between $2 billion to $3 billion, according to The Wall Street Journal. Earlier reports focused on Yahoo or Microsoft as a possible buyers for Skype, which has raised VC funding from Draper Fisher Jurvetson, Bessemer Venture Partners and Index Ventures.

    VC Deals

Direct Flow Medical Inc., a Santa Rosa, Calif.-based developer of an aortic tissue valve prosthesis, has raised $8.45 million in Series A funding. New Leaf Venture Partners and Spray Venture Partners co-led the deal, and were joined by existing shareholder EDF Ventures.

Kotura Inc., a Monterey Park, Calif.-based provider of silicon photonic products, has raised $13 million in Series 2 funding. GF Private Equity Group led the deal, and was joined by Viterbi Group and return backers ComVentures and ARCH Venture Partners. Kotura has raised $24 million in total VC funding since being formed out of the 2003 merger of Arroyo Optics and LightCross.

Partech International and Canaan Partners have sponsored a spinout of Aliso Viejo, Calif.-based Vue Technology Inc. (f.k.a. Intelligent Systems) from MeadWestvaco’s New Ventures Group. The deal results in Partech, Canaan and MeadWestvaco all holding board seats with Vue, which focuses on RF networking and item-level RFID solutions.

    Buyout Deals


J.C. Flowers & Co. LLC has agreed to buy Crump Group Inc., the U.S.-based wholesale broking operation of Marsh Inc., a unit of Marsh & McLennan Cos. (NYSE: MMC). No financial terms were disclosed. Banc of America Securities served as financial advisor to Marsh, while Lazard served in a similar capacity for J.C. Flowers.

Ford Motor Co. is leaning toward selling its Hertz Corp. car rental business to a private equity group that includes Clayton Dubilier & Rice, Carlyle Group and Merrill Lynch Global Private Equity, according to The Wall Street Journal. A decision could be made within the next day, with the sale expected to be valued at between $5.5 billion and $6 billion (plus the assumption of more than $10 billion in debt). An alternate bid reportedly has been submitted by a consortium that includes Bain Capital, Blackstone Group, Texas Pacific Group and Thomas H. Lee Partners.

Permira, CVC Capital Partners and PAI Partners have received the 75% shareholder approval they needed for their acquisition of Spain-based clothing retailer Cortefiel SA.

Bob Guccione Jr., founder of Spin and Gear magazines, has teamed with two unnamed private equity firms to buy Discover magazine from The Walt Disney Co. for an undisclosed amount.

AmeriCast Technologies Inc., a maker of steel and iron sand castings, machined components and assemblies, has completed a $95 million recapitalization. Proceeds went to refinance the company’s debt, fund a $26.1 million distribution to shareholders and provide $25 million to fund future acquisitions. AmeriCast was formed in December 2003 by KPS Special Situations Fund, in order to purchase certain assets of Atchison Casting Corp. out of Chapter 11 bankruptcy for approximately $40 million (plus $15 million of new equity capital).

First Atlantic Capital has agreed to buy Precision Parts International from Morgenthaler Partners. No financial terms were disclosed. Precision Parts is a Rochester Hills, Mich.-based manufacturer of high-precision metal components and subassemblies, and was originally formed as an acquisition platform by Morgenthaler.

    PE-Backed IPOs

Horizon Lines Inc., a Charlotte, N.C. container shipping company, has set its proposed IPO terms to around 15.63 million common shares being offered at between $15 and $17 per share. It plans to trade on the NYSE under proposed ticker symbol HRZ, with Goldman Sachs and UBS serving as lead underwriters. Castle Harlan acquired Horizon Lines last July from The Carlyle Group, in a transaction valued at $663.3 million. Carlyle had taken control from CSX Corp. as part of a February 2003 recapitalization.

VistaPrint Ltd., a Bermuda-based holding company for Lexington, Mass.-based graphic design and printing services provider VistaPrint USA Inc., has set its proposed IPO terms to around 10.05 million common shares being offered at between $9 and $11 per share. It plans to trade on the Nasdaq under ticker symbol VPRT, with Goldman Sachs and Bear Stearns serving as lead underwriters. VistaPrint has raised around $76 million in total VC funding since its 1995 inception, with significant shareholders including Highland Capital Partners, HarbourVest Partners, SPEF Ventures, Sofinnova Partners and Window to Wall Street Inc.

Eutelsat SA, a France-based satellite company, is planning a public flotation by late next year that would value the company at between 2 billion euros and 3 billion euros. Shareholders include Texas Pacific Group, Spectrum Equity Investors, GS Capital Partners, Cinven abnd Eurazeo.

    PE-Backed M&A

OfficeTiger Inc., a New York-based provider of business process outsourcing (BPO) solutions, has agreed to acquire MortgageRamp Inc., an Atlanta–based provider of BPO and technology solutions for the global real estate finance industry. No financial terms were disclosed. OfficeTiger is a portfolio company of Francisco Partners, while MortgageRamp has raised VC funding from such firms as Hewlitt-Packard, DB Investor, Fannie Mae, Allied Capital, GMAC Commercial Mortgage and VerticalNet.

    Firm News

Northwest Capital Appreciation of Seattle will begin raising its third fund early next year, with a $250 million target capitalization. The firm also has made several personnel additions, including: John Jacobs, partner, formerly managing partner of Capital Run; Cameron Hewes, principal, formerly with Capital Run; Ryan Secrist, vice president, formerly with Capital Run; Erik Tolzmann, associate, previously with Capital Run; and George Vojta, senior operating partner for corporate governance and LP relations, former vice chairman of Bankers Trust.

Red River Capital has launched as a Rock Rapids, Iowa-based venture firm focused on small businesses in the Rock Rapids area. It is initially capitalized with $500,000 from the Minnesota Investment Network and local angel and institutional backers.

Cooley Godward LLP has opened an office in Washington, D.C.

    Human Resources

Philip Kemp has joined Helix Associates Ltd. as a managing director, after previously having been responsible for investor relations with Doughty Hanson & Co. Helix is a UK-based private equity fund placement agency owned by Jefferies Group Inc. (NYSE: JEF).

Debra Anderson has agreed to join Blackstone Group as a managing director in the firm’s corporate debt group. She will be charged with establishing Blackstone’s European presence as a manager of non-investment grade assets issued by European companies. She most recently served as the leveraged loan portfolio manager for Intermediate Capital Group PLC.

Eugene Lee has joined the Hong Kong office of Latham & Watkins LLP as of counsel in the corporate department. He will focus primarily on the capital markets and mergers and acquisitions. He previously worked in both Hong Kong and Singapore with Simpson Thacher & Bartlett LLP.

Frederick Roth has agreed to join 3i Group’s European buyouts team as a senior director, effective January 1, according to PrivateEquityOnline. He will be based in Frankfurt, and previously worked for Permira.

Gabrielle Guttman has joined Southridge Capital Management as vice president of business development and marketing.

Michael Baldinger has joined Credit Suisse Asset Management as head of U.S. Sales. He previously was a managing director in the institutional equities sales group of Bear Stearns & Co.

David Thomas, managing director of Intel Capital Latin America, has been elected chair of the Latin American Venture Capital Association’s board of directors. He succeeds Richard Frank, CEO of Darby Overseas, who has completed his term.

Howard Morgan, a partner in First Round Capital and an Idealab director, has been elected chairman of the Franklin Electronic Publishers Inc. (AMEX: FEP) board of directors.


Just Linking Around

No real column today, as the news section took up my entire morning (38 items, which may be a new record). But so as not to leave you completely empty-handed, a couple of quick links:

*** Fred Wilson of Union Square Ventures decries style drift. I’ve complained about this trend for a while, particularly among “early-stage” VCs in Massachusetts, who spent 2002-2004 drifting father and farther downstream. I keep hearing that the situation is better in 2005 (from both VCs and entrepreneurs), but the numbers haven’t yet caught up. In fact, they’re getting worse. In Massachusetts, for example, 31.3% of all VC deals done in 2004 were either seed-stage or early-stage, according to the MoneyTree Survey. As of yesterday, however, the 2005 percentage is just 26.4 percent. It’s even worse in California, where the percentage has dropped from 32.11% in 2004 to 16.43% in 2005. At some point, this lack of early-stage backing is going to disrupt deal-flow for the now-saturated expansion-stage and later-stage markets.

*** Brad Feld of Mobius VC on why he, a man, serves as chair of the National Center for Women & Information Technology.

*** Jeff Clavier of SoftTech Venture Consulting on why it’s important to keep a close eye on your company’s ads (scroll down to second item).

    Top Three


JPMorgan Partners Asia has closed its second fund with $1.575 billion in capital commitments. The fund – named Asia Opportunity Fund II – will back leveraged buyouts of medium-to-large companies in the Asia Pacific region, beginning in November. It had been marketed with a $1.2 billion target capitalization.

Lefthand Networks Inc., a Boulder, Colo.-based provider of storage area network solutions, has raised $25 million in Series C funding. Valhalla Partners led the deal, and