Term Sheet -- Monday April 16

How John Doerr Keeps Companies On the Right Track

Good morning, Term Sheet readers. Andrew Nusca and Lucinda Shen filling in for Polina.

Why are so many of our great companies, organizations, and institutions failing us? Because they’re setting the wrong objectives. Or worse, they’re setting none at all.

At the TED conference in Vancouver on Saturday, John Doerr took to the stage to make an impassioned case for the importance of OKRs, or Objectives and Key Results. Too many organizations have taken us to the wrong objectives, he said. Often those objectives lack a sense of purpose to energize teams—a sense of why. “This has to stop,” Doerr said.

“It almost doesn’t matter what you know,” he added, paraphrasing the late Intel CEO Andy Grove. “Execution is what matters most.”

To Doerr, objectives outline what you want to accomplish. They must be significant, concrete, action-oriented, and inspiring—“A kind of vaccine against fuzzy thinking,” he said. Meanwhile key results stipulate how you’ll get it done. They must be “specific but time-bound, aggressive yet realistic, measurable and verifiable,” Doerr said.

Transformational teams have a clear sense of “why,” Doerr said. OKRs, set and made transparent by everyone in an organization, help clarify that. “A compelling sense of why can be the launchpad for our objectives,” the investor said. And it can keep top talent in place.

Over the years, the acronym has become a sort-of mantra for the famed Kleiner Perkins Caufield and Byers venture capitalist, who more recently turned it into a book (Measure What Matters; Portfolio, $14) he describes as “my love letter to our future.” Doerr first presented OKRs to two young founders named Sergey Brin and Larry Page in 1999; their company Google (now Alphabet) has now gone on to become the world’s second most valuable by market capitalization. It still uses the OKRs system, alongside the Gates Foundation, rockstar-philanthropist Bono, and myriad entrepreneurs.

Yet “OKRs are not a silver bullet,” Doerr warned. “They’re not going to be a substitute for a strong culture or strong leadership.”

But they are a way for leaders to hone in on what really matters—with hope that their organization can get on the right track.

“Do you have the right metrics? Take time to write down your values, your objectives, and your key results,” Doerr urged his audience. “Do it today.”

Read the article here.

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...AND ELSEWHERE

Apollo Weighs Tronc bid. Guggenheim under SEC investigation. The U.S. housing shortage. Toy tycoon weights $900 million bid for Toys R Us’. Partners Group and Charlesbank Capital near deal to acquire Hearthside Food Solutions. Rich investors want more private equity.

VENTURE DEALS

• ServiceTitan, a Glendale, Calif-based HR software firm for home-service businesses, raised $62 million in Series C funding in March in a round also joined by HIVE Ventures. Battery Ventures led the round and was joined by investors including Bessemer Venture Partners and ICONIQ Capital.

• Mixcloud, a London-based long-form digital audio streaming platform, raised $11.5 million in funding. WndrCo led the round.

• Sensu, a Portland-based open-source software maker collecting data, raised $10 million in Series A funding. Battery Ventures led the round and was joined by investors including Foundry Group.

• PullRequest, an Austin-based code review platform, raised $8 million in Series A funding led by Google’s Gradient Ventures.

• Kolide, a Cambridge, Mass.-based security-first infrastructure analytics company, raised $8 million in Series A funding. Matrix Partners led the round.

• SWORD Health, a Portugal-based creator of the AI-powered digital physiotherapist SWORD Phoenix, raised $4.6 million in seed funding. Green Innovations and Vesalius Biocapital III led the round.

• InsightFinder, a New York-based AI cloud analytics company, raised $2 million in Pre-Series A funding. Eight Roads led the round and was joined by investors including Propel(x).

• Level Ex, a Chicago-based video game maker for physicians, raised an undisclosed amount in funding from SF Ventures.

• DSG Consumer Partners invested in Alcheme, a Singapore-based personalized skincare company. Read more.

• AgNext, an India-based agriculture data dirm, raised an undisclosed amount of funding. Omnivore led the round.

PRIVATE EQUITY DEALS

• Blackstone acquired Center for Autism and Related Disorders, a Woodland Hills, Calif.-based provider of autism spectrum disorder tests. Financial terms weren't disclosed.

• Power Grid Component, a portfolio company of Shorehill Capital, acquired Instrument Transformer Equipment, a Monroe, N.C.-based maker of electric metering instruments. Financial terms weren't disclosed.

• Alpine Investors invested in Comlinkdata, a Boston-based provider of telecom data analytics software and insights.

OTHER DEALS

• Verve, acquired JusCollege, a Las Vegas-based student travel firm, for $25 million.

• Goldman Sachs acquired Clarity Money, a New York-based financial services firm. Financial terms weren't disclosed.

• The Adecco Group, a Swiss HR solutions partner, acquired General Assembly, a New York-based maker of accelerated learning programs for an enterprise value $412.5 million.

IPOs

• Smartsheet, Bellevue, Wash.-based spreadsheet provider, plans to raise $128 million in an offering of 11.6 million shares priced between $10 to $12 apiece. The company posted loss of $53.7 million and $111 million in sales for the 12 months ending Jan. 2018. Insight Ventures (32.1% pre-offering), Madrona Ventures (28.4%), and Sutter Hill Ventures (5.4%), back the firm. Morgan Stanley, J.P. Morgan, Jefferies, and RBC Capital Markets are joint bookrunners in the deal. The firm plans to list on the NYSE as “SMAR.”

• nLight, a Vancouver, Wash.-based semiconductor and fiber laser maker, plans to raise $76 million in an IPO of 5.4 million shares priced between $13 to $15 apiece. The firm posted revenue of $138.6 million in 2017, and income of $1.8 million. Greenover Group (5.8% pre-offering), Wellington Management (12.1%), Menlo Ventures (21.5%), Mohr, Davidow Ventures (18.9%), and Oak Investment Partners (20%) back the firm. Stifel and Raymond James are lead underwriters in the deal. Nlight plans to list on the Nasdaq as “LASR.”

• ASLAN Pharmaceuticals, a Singapore-based biotech, plans to raise $60 million in an IPO of 37.5 million shares priced at $1.61. The firm posted loss of $40 million in 2017. Shanghai Cenova and BioVeda Singapore back the firm. Leerink Partners and Piper Jaffray are joint bookrunners on the deal. The firm plans to list on the Nasdaq as “ASLN.”

EXITS

• Jet Aviation agreed to acquire Hawker Pacific Airservices, a Sydney, Australia-based general aviation service provider, from Britton Hill Partners for $250 million.

• Funds backed by Arjun Infrastructure Partners agreed to acquire a 75% equity stake in South Staffordshire, a U.K.-based water regulatory firm, from KKR.

FIRMS + FUNDS

• Cyberstarts VC, raised $54 million for its first venture fund, Reuters reports. Sequoia Capital Israel General Partner Gili Raanan formed the fund.