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Category: Venture capital

Ashton Kutcher talks 'Two and a Half Men' and tech investing

Kutcher

Ashton Kutcher probably gets more pitches in Silicon Valley than Hollywood these days.

The movie actor and technology investor turned up the star power at the TechCrunch Disrupt conference this week in San Francisco, where start-up companies competed for his attention. Michael Arrington, fresh off his own Hollywood worthy drama, interviewed Kutcher on stage Tuesday.

Kutcher plays a tech investor in real life and in CBS' top-rated "Two and a Half Men" on TV. His character, Walden Schmidt, is an Internet billonaire who sold his company to Microsoft and now backs other entrepreneurs.

"There are some parallels to my actual life," Kutcher said.

On the show, Kutcher said he covered his character's laptop with stickers of his "dream portfolio" companies but CBS balked at giving exposure to companies that hadn't paid for the privilege.

Kutcher told Arrington that his investments were a "witch hunt" for the next big thing "that is so magic you can't understand how it works."

"I wonder what would happen if a pilgrim would have seen a computer back in Massachusetts 200 years ago. They would have killed the person as a witch because the computer would look like magic. That's the essence of being a good investor, they're on witch hunts," he said. "That's what I’m trying to do."

Kutcher is not your typical celebrity investor. He was a biochemical engineering major in college so he gets technology but, because he was a model at 19, he says it's nice to be appreciated for "something substantial."

On TV Kutcher is in the funny business. But in technology he's hunting for happiness. Kutcher says he picks technologies that have the greatest potential to create more love, friendship and connectivity in the world.

He has made 40 investments in companies such as AirBNB, Path and Skype but does not disclose many of them.

"I think sometimes for the early-stage companies that I've invested in, disclosing that I'm an investor can be detrimental to the story of the company," Kutcher said.

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-- Jessica Guynn

Photo: Hollywood actor and Silicon Valley investor Ashton Kutcher and TechCrunch founder Michael Arrington at TechCrunch Disrupt. Credit: Araya Diaz / Getty Images

TechCrunch founder Michael Arrington issues ultimatum to AOL

Arrington

Michael Arrington is slated to be in San Francisco next week for TechCrunch's Disrupt conference.

Disrupting is certainly an art that Arrington has mastered. And now he's giving his AOL overlords (and Arianna Huffington) the Imax version.

His ultimatum on Monday: that AOL restore editorial independence to the popular tech blog or sell TechCrunch back to Arrington, the newly minted venture capitalist (who apparently would need funding to buy it; might we suggest the CrunchFund). If not, Arrington says he'll quit (the job he was already ousted from).

TechCrunch's MG Siegler says that TechCrunch may formally dump Arrington on Monday. "TechCrunch is on the precipice," he wrote in a blog post on -- where else -- TechCrunch. All Things D's Kara Swisher, who has a sweet spot for the blogger she has dubbed Yertle, says Arrington is lobbying AOL Chief Executive Tim Armstrong (who famously told the New York Times that TechCrunch has different journalistic standards than the rest of AOL's media properties) to sell him back TechCrunch.

Arrington could not be reached for comment. Usually desperate for attention, AOL has clammed up even as this public relations nightmare marches into its second week with a fresh head of steam.

A recap: Last week Huffington bounced Arrington from TechCrunch after he and her boss, Armstrong, unveiled plans to launch a venture fund with a high-profile group of Silicon Valley investors, a move that Gawker calls hypocritical because Huffington has closed her eyes to other conflicts of interest.

Arrington and other TechCrunch writers are protesting; they say AOL promised TechCrunch editorial independence. AOL bought TechCrunch a year ago for $30 million.

On Monday, Arrington said he had just one magnet on his refrigerator: "No drama." (If not drama, perhaps comedy?)

"So," he deadpanned on Facebook, "don't say I didn't try."

Now all the tech world can do is wait for AOL's next move. And pass the popcorn.

RELATED:

TechCrunch writer takes on AOL CEO Tim Armstrong

AOL says Michael Arrington no longer works at TechCrunch

TechCrunch blogger Mike Arrington starts venture capital fund

-- Jessica Guynn

 Photo: Michael Arrington in 2008. Credit: Randi Lynn Beach / For The Times 

Trouble for tech in market sell-off

Ripgoodtimes The double-whammy of the S&P downgrade of U.S. government debt and double-dip recession fears is turning into a real downer for tech stocks.

The Nasdaq fell nearly 7% on Monday, even peeling some of the glow from Wall Street darling Apple.

But few tech companies have been as hit as hard as LinkedIn in the market sell-off. The first major U.S. social networking company to go public beat analysts' estimates for second-quarter earnings last week. But the stock fell more than 17% in trading Monday.

LinkedIn was not alone. Other tech companies that recently went public also fell. Does that mean the initial public offering window for tech companies could slam shut again as investors look for safer bets?

"I don't think anyone has a good answer on that yet, it's too raw and too new,” Deutsche Bank communications technology analyst Jonathan Goldberg told VentureBeat. "In general, market conditions are going to make it hard for any IPO to come out."

That could spell trouble for social gaming company Zynga and daily deals website Groupon, both of which have filed to go public. It could also postpone IPOs from other prominent players such as Yelp.

That, in turn, could have a chilling effect on the tech boom in Silicon Valley that has seen investors throw billions at start-ups.

Could another global meltdown trigger a repeat of Sequoia Capital's 2008 "RIP Good Times" presentation? That's when the venture capital firm invited about 100 executives from its portfolio companies to give them a sobering overview of what the economic crisis meant for Silicon Valley and their start-up dreams.

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LinkedIn earnings beat expectations

Web 2.0: Rest in peace

-- Jessica Guynn

Image credit: Sequoia Capital

 

LivingSocial reportedly preparing for $1-billion IPO

LivingSocial

LivingSocial is reportedly preparing to file for an initial public offering of stock that could seek to raise about $1 billion for the daily deals website.

The Washington, D.C., company has selected Bank of America Merrill Lynch, Deutsche Bank and JPMorgan Chase & Co. as its three underwriters for the IPO and have the valuation of the company set somewhere between $10 billion and $15 billion, according to CNBC, which first reported on the plans.

Andrew Weinstein, LivingSocial's head of communications, said "we don't comment on rumors or speculation" when asked about the validity of the reports.

The Wall Street Journal and New York Times said they've verified the CNBC story through unnamed sources.

Groupon, which also offers local deals online tied to specific cities, filed for an IPO of its own in June that is looking to raise $750 million. Groupon has said it operates in 175 North American markets and 43 countries and has about 83.1 million subscribers.

LivingSocial has said previously that its user base is made up of about 10 million subscribers in more than 120 markets and five countries.

In December, Amazon.com, the Web's largest retailer, invested $175 million in LivingSocial alongside an $8-million investment from Lightspeed Venture Partners of Menlo Park, Calif.

LivingSocial has yet to file an S-1 form, which would declare and detail its IPO plans, with the Securities and Exchange Commission.

RELATED:

Groupon files for a $750-million IPO

LivingSocial scores $175-million investment from Amazon.com

LivingSocial creates frenzy by selling $20 Amazon gift cards for $10

-- Nathan Olivarez-Giles

twitter.com/nateog

Image: A screenshot of LivingSocial's website displays discounts for Los Angeles. Credit: LivingSocial

Twitter co-founder Biz Stone signs on as advisor at Spark Capital

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Twitter Inc. co-founder Biz Stone isn't taking any time off after leaving his job as creative director of the popular social networking service.

He's splitting time between his nonprofit, the Biz and Livia Stone Foundation, and working to get his reborn startup incubator Obvious Corp. up and running again with Evan Williams, Twitter co-founder and former CEO, and Jason Goldman, Twitter's former vice president of product.

And now Stone is an advisor at Spark Capital, a venture firm that was among Twitter's early investors.

"Helping Spark Capital evaluate cool startups is a pretty great advisory role," Stone said in a tweet. "I'm excited about it."

Bijan Sabet, one of the partners at the Boston-based Spark, announced Stone's role at the firm in a blog post Thursday, saying that Stone's "creative instincts and understanding of the social web" have resulted in him being routinely blown away.

"His tireless efforts to tell the story and promise of Twitter has been inspirational," Sabet said of Stone. "I have learned much from his obsession with company culture and importance of mission for a young company. And his instincts about brand and community are simply extraordinary."

As a strategic advisor at Spark, Stone will lend his opinion in choosing new and current investments, Sabet said.

Spark holds investments in Twitter, social blogging service Tumblr Inc., location check-in app Foursquare, online ad firm Admeld Inc. (which Google is in the process of taking over) and Web-TV peripheral Boxee Inc.

RELATED:

FTC investigating Twitter's relationships with UberMedia, third-party app makers

Twitter founders Evan Williams and Biz Stone reunite in Internet incubator Obvious Corp.

Twitter VP Jason Goldman steps down (and gives his thoughts on what made Twitter a success)

-- Nathan Olivarez-Giles

twitter.com/nateog

Jeffrey Jordan, Opentable's ex-CEO, joins Andreessen Horowitz, invests in LikeALittle flirting app

Jeffrey Jordan -- who has in the past run Opentable, PayPal and Ebay -- is joining Silicon Valley venture capital firm Andreessen Horowitz as a general partner.

10442 Jordan stepped aside as Opentable's chief executive in May after leading the online reservation service to its initial public offering, but remains with the company as its executive chairman. Opentable's stock has been in a decline since a six-month high on April 25 at $115.62 a share.

At Andreessen Horowitz, Jordan is taking a board seat as the firm's fifth partner and he's already made his first investment, contributing to a $5-million round of funding the VC is injecting into Hawthorne Labs, maker of LikeALittle, a social networking app that enables users to flirt with others who are physically located nearby.

Marc Andreessen, the firm's co-founder and a partner, announced Jordan's addition in a blog post Thursday in which he described the former chief executive as "legendary."

"Jeff has run three of the iconic businesses of the Internet revolution," Andreessen said. "Most recently, Jeff has been CEO and remains executive chairman of Opentable, which has transformed the restaurant industry -- with 20,000 restaurants and 200 million diners served. Before that, Jeff ran Paypal, the definitive online payments company of the Internet era, resulting in a business with 133 million user accounts and $38 billion of payment volume when he left. And before that, Jeff ran Ebay North America for five years, where he helped build Ebay into the Internet's leading e-commerce company and led Ebay's successful and transformative acquisitions of Paypal and Half.com."

Evan Reas, in a statement, said that Jordan would be advising LikeALittle's development in Palo Alto.

"Jeff knows how to scale an organization as good as anyone in the world," Reas said. "After leading two public companies, he has learned a thing or two. Most exciting, he knows how we can grow, but still keep our hacker culture that keeps us so productive. "

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Pulse news app raises $9 million in funding, passes 4 million downloads

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-- Nathan Olivarez-Giles

twitter.com/nateog

Photo: Jeffrey Jordan. Credit: Opentable

Foursquare raises $50 million in new funding

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Foursquare on Friday announced that it has raised $50 million in funding that will help the "check-in" app maker expand internationally and build out new products.

"The thing that's most exciting is that we think we're inventing the future here a bit," Dennis Crowley, Foursquare's co-founder and CEO, said in an interview. "We're doing things nobody has really done before, and to be able to raise this amount of capital will really allow us to look at the white board and accomplish the goals we have written up there -- things we've been wanting to do for awhile now."

The funding is the latest announcement this week for the New York start-up, which also passed 10 million registered users and inked a deal with American Express.

Foursquare's collaboration with the credit card company will allow users to tie their activity in the Foursquare smartphone app to their American Express accounts and get discounts on their monthly statements when they both check in and buy things using their AmEx card at select retailers nationwide.

Crowley said that one of the more immediate uses for the funding would be hiring engineers in New York and San Francisco who wouldbe tasked with continuing to build out Foursquare's existing services -- such as the Foursquare Merchant Platform, which allows businesses to offer discounts to Foursquare users and gives them data on when people check in at their business and how often.

"The Foursquare Merchant Platform is used by more than 400,000 merchants, and there's a lot more room to grow there," Crowley said. "About 50% of our users are coming from outside of the U.S., and we believe there's a lot of room to grow there too. Right now we're seeing a lot of traction in Brazil, a little bit in India and Russia, and we want to keep that going."

To maintain such momentum -- in the face of challenges from smaller start-ups like Gowalla and tech giants Google and Facebook -- funding is crucial, but $50 million should be enough to achieve what the company has planned, Crowley said.

The latest funding round was led by Andreessen-Horowitz, with contributions from O'Reilly AlphaTech Ventures, Union Square Ventures and Spark Capital.

"The investors who stepped up in this round, they've all invested in us before," he said. "It's a big vote of confidence from our existing investors in what we're doing as a company. They believe in what we're doing, they're showing us that and they're really giving us the resources to keep doing what we're doing."

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Foursquare has more than 10 million users

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About 1 in 5 smartphone owners use location-based check-in apps

-- Nathan Olivarez-Giles

twitter.com/nateog

Photo: Dennis Crowley, co-founder and CEO of Foursquare, presents an award at the 15th annual Webby Awards in New York on June 13, 2011. Credit: Lucas Jackson/Reuters

Pulse news app raises $9 million in funding, passes 4 million downloads

Pulse

Pulse, a popular news-reading app for Apple's iOS and Google's Android, could end up being the Netflix of the news business if Akshay Kothari can have his way.

Kothari is one of two 24-year-old co-founders -- along with fellow Stanford Institute of Design grad Ankit Gupta -- of Alphonso Labs, the Palo Alto start-up that makes Pulse, which is on a bit of a hit streak lately.

Alphonso Labs announced Thursday that it had closed a $9-million round of funding to help Pulse make its way to other mobile platforms. Pulse won an Apple Design Award at the tech giant's annual Worldwide Developer Conference this month. Alphonso Labs also rolled out a new website, Pulse.me, which enables its users to save stories they find on the Web to read in the Pulse app later on.

This month Alphonso Labs surpassed 4 million downloads of Pulse across Apple's iPad, iPhone and iPod Touch, as well as phones and tablets running Android.

"We really want to create something that stays with you wherever you are, that stays consistent across platforms and devices," Kothari said in an interview Friday. "I really like how Netflix works in wherever you stop watching something, it picks up right where you left off. No matter what app or platform you're using Netflix on, you can pick up at the same spot if you want next time you use Netflix. You don't have to start over.

"I'd like to bring that sort of thing to news reading, so we might explore that a bit."

Pulling off such a lofty goal, and being as disruptive to publishing and journalism as Netflix has been to movies and TV, will take some resources -- probably far more than the $9 million that Alphonso Labs has just raised.

It will also take having the right people guiding the company's growth, Kothari said, who noted that he believes the company has the right people in place.

Those people include Alan Patricof and Ken Lerer, who were part of the team that first financed the Huffington Post website, which has provided a bit of disruption to the paradigm of news websites and blogs.

Patricof is managing director at Greycroft Partners and Lerer manages Lerer Ventures, two venture capital firms which, along with New Enterprise Associates, make up the funders of Alphonso's $9-million round of Series A investments.

Lerer will serve as an advisor to the app maker, which was founded just 13 months ago. Patricof, along with New Enterprise's co-head of consumer investing, Patrick Chung, will join Alphonso Labs' board of directors.

Kothari said the new leadership and advice should help Pulse, a 10-employee company, continue to grow by bringing in some news-industry savvy that wasn't around before.

"I think not having the background allows us to in some ways think from a very clean-state perspective," he said. "We're basically technology people. We're product people. We don't have a deep understanding of journalism or publishing. But we do have a deep understanding of user interface and we just wanted to make news reading fun again."

As graduate students at Stanford when Alphonso was founded, Kothari said he and Gupta were hoping to make Pulse something people would want to go back to multiple times a day, in the way millions of people do with other popular mobile apps.

"If you have five minutes in a coffee shop and you look at your phone, you're looking at Twitter or Facebook," Kothari said. "So we wanted to try and make that five minutes worth spending in our app becoming more informed, reading the news. And what we're seeing is the same person coming back four or five times a day to get some small news and then coming back again. We don't have a lot of people just sitting reading in the app for an hour."

While that type of user behavior is what Alphonso Labs had hoped for, other user reactions have been a bit unexpected, he said.

"I wouldn't have thought it would have ended up here when we started as really a class project," Kothari said. "We didn't do any marketing for the app, but when Steve Jobs introduced the iPhone 4, he mentioned some iPad apps they liked and we were one of the apps mentioned. That really helped. And from there, we've just seen more and more growth."

By the end of November, Pulse was downloaded 200,000 times, "and in just six months from that, we've passed 4 million," he said. "It really feels like a dream sometimes."

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-- Nathan Olivarez-Giles

twitter.com/nateog

Image: A screenshot of Alphonso Labs' Pulse news-reading app on an Apple iPad. Credit: Alphonso Labs /Apple

OpenX, Web ad firm, raises $20 million, expects to be profitable within a year

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Pasadena-based OpenX Technologies Inc., the online advertising firm whose products are built on largely open-source technology, has raised $20 million in additional venture capital, an infusion it believes will be the last one it needs on the way from a tiny start-up to a full-fledged digital ad concern.

Since its founding in 2007, OpenX has raised $50 million over four investment rounds. OpenX makes and distributes software that allows websites to sell the space on their pages to marketers, much like highway billboard owners look to profit by renting their blank signs to whatever advertiser will pay the highest price. The company says its ad software is used by 200,000 websites in more than 100 countries.

"We continue to make a lot of progress," said Tim Cadogan, the company's chief executive. In just the last year, he said, OpenX, has doubled its headcount to 100, and hopes to add another 50 this year. The company's early success, Cadogan said, has "drawn attention from a lot of really interesting big global companies who want to help us grow."

The latest venture round was led by SAP Ventures, the investment arm of German business software giant SAP. The round included new backers AOL Ventures, Japan's Mitsui & Co. Global Investment Inc. and Presidio Ventures, as well as earlier investors Accel Partners, Index Ventures and DAG Ventures. 

OpenX is trying to capitalize on the rapid growth of the display advertising business, which deals the visual ads you see on Web pages rather than the text-based kind alongside search results.

In the U.S. last year, the $12-billion search advertising market, long dominated by Google Inc., was still larger than the market for display ads, according to a recent report from the Internet Advertising Bureau. But the display market grew 24%, to $9.9 billion, nearly double the growth of search advertising.

Unlike the painstaking hand-selling of ads well-known in the print and magazine world, OpenX's systems enable digital blank space to be automatically sold and resold every time a new user visits the page -- potentially thousands of times every minute. Those transactions are taken care of by bidding algorithms that conduct lightning-fast auctions, seeking the best price in milliseconds, then sending the winning ad to be featured on the Web page. OpenX takes a 20% cut of most of those transactions.

The company says revenue from its ad marketplace, called OpenX Market, has increased 600% over the last year and that the firm brings in "many tens of millions" in annual revenue. OpenX expects to be profitable within a year and, Cadogan said, the added cash should help the company go "the whole way" toward going public.  

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-- David Sarno

Photo: Congressman Adam Schiff (D - CA), left, visiting OpenX and CEO Tim Cadogan in August 2010. Credit: Alex J. Berliner

Andreessen Horowitz creates $200-million 'growth-stage' investment fund

  Cash

Andreessen Horowitz announced Wednesday the formation of a $200-million investment fund, pushing the firm to a total of $1.2 billion in investments overseen.

A16zlogo The Menlo Park, Calif., venture capital firm will use the new fund to invest in "growth-stage" companies that are past an initial "seed round" funding level or a secondary "venture round" funding stage, John O'Farrell, a general partner at Andreessen Horowitz, wrote in a blog post.

"These companies have a substantial need for capital -- they're hiring aggressively, expanding internationally, making acquisitions, investing in facilities, pouring money into marketing -- all to double down on their success and win the entire market," O'Farrell said of the types of companies the fund will target.

"Often, they want to meet their needs with one new investor. The size of their market opportunity allows for very attractive returns for the investor they choose to work with."

Andreessen Horowitz is known for its investments in successfull tech companies that have gone from start-ups to major players, such as Box.net, Facebook, Groupon, Skype, Twitter and Zynga.

The company is currently invested in more than 30 companies.

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Venture capitalists bet on former Facebook exec Dave Morin's social networking service Path

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-- Nathan Olivarez-Giles

twitter.com/nateog

Photo:  Cash.  Credit:  Getty

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