Even though everybody and their grandmother has a Facebook account, not everybody and their grandmother loves the social media giant. There's been a lot of grumbling about Facebook's occasionally liberal "profits first" privacy policies. So if users don't like Facebook's policies, why don't they just stop using the service? Former MySpace CTO Dmitry Shapiro has a theory: because there aren't only good alternatives. Rather than simply whine about Facebook's drawbacks, Shapiro went out and raised funding from investors in order to create a new, privacy-friendly Facebook alternative named Altly.
It seems that the magic number for venture-capital firm New Enterprises Associates (NEA) is $2.5 billion, which is equal to the amount the company announced it closed on its thirteenth fund it began investing in May 2009. This is about the same amount as NEA's prior fund in 2006, which closed a little over $2.5 billion.
The fund ties for the fifth-biggest in the venture-capital industry's history, and according to Bloomberg, suggests that the largest firms can still raise some serious cash during a recession.
"The big firms can do what they want, because everyone knows this fund may be your one chance to get in," said Lise Buyer, a former venture capitalist who consults for companies preparing to go public. "If you can get in, you can stay in."
NEA said core investment areas of the new fund will focus on information technology, energy technology, and healthcare.
HealthGuru.com publisher HealthGuru Media has raised $3.2 million in Series C funding, the company announced on Wednesday. The round was spearheaded by Castile Ventures with HealthGuru’s existing investor Village Ventures also pledging fresh funds.
Many venture capitalists have drawn in their horns and are biding their time – waiting for the financial tempest to make way, but Google is unfazed. It has setup a new venture fund called Google Ventures. The group will invest up to $100 million in businesses that catch its attention. David Drummond, William Maris and Rich Miner are the people in charge of Google Ventures.
According to William Maris, an entrepreneur and investor brought in to oversee the fund, the fund will make full use of the company's links to search for startups. The fund will focus on startups in sectors like the internet, green technology and life sciences. The fund might be in its youth but it has already invested in two companies. One of them, Silver Spring Networks, develops electric grid management system and the other, Pixazza, is an internet company.
As the economy finds it increasingly difficult to free itself from the clutches of the proverbial bear, it is safe to assume that the eagerness with which investors rallied to fund tech startups has been consigned to history, at least for the time being. The tenebrous economy has also made angel investors nervous. Angels are now trying to maintain a safe distance from tech start-ups just like all other investors.
Most tech start-ups count on angel investors for funds in their infancy. However, the economic meltdown has sapped their otherwise unbridled optimism. According to a survey conducted by the Angel Capital Association in November, fifty percent of investors invested well within their expectations in 2008. And one in every three angel investors feels that the slide in investments will continue.
The abysmal lack of confidence isn’t the only thing to blame, but the dearth of liquidity has also forced them to pull in their horns. However, the doughtier investors are still investing, though at a decreased pace, as they want to make the most of plummeting company valuations.
Dan Martin, a San Francisco-based angel investor, told CNET that stocks are a better investment avenue than “investing in the friend of a friend who wants to open a green Chuck E.” But there is still hope for budding tech entrepreneurs as many angels are expected to make joint investments with others in their fraternity.