Term Sheet — Tuesday, October 7

A few readers emailed to suggest I missed the boat. For example, Ryan wrote: “Yahoo is able to invest in Snapchat because of the money it made from its earlier investment in Alibaba. It probably views this as its next Alibaba.”

No, it doesn’t. Because it can’t.

To be clear, I’m not saying this as an indictment of Snapchat. I’m saying it as someone who passed fourth-grade math.

Yahoo’s original $1 billion investment in Alibaba is currently valued at around $51.1 billion, if you include three things: (1) The 2012 share buyback, which included $6.3 billion in cash; (2) The IPO, which generated around $9.4 billion for Alibaba; and (3) Yahoo’s remaining stock holdings in Alibaba, which are valued at around $35.4 billion. Or, put another way, a return of around 51x.

Yahoo’s reported deal for Snapchat would be an investment of around $20 million at a $10 billion valuation. To get the same multiple, Snapchat would need to be valued at around $501 billion. For context, that would make it the second-largest company traded on a U.S. exchange, behind only Apple. It would be more than $100 billion larger than current second-place company Exxon Mobil, and not to mention such companies as Microsoft, Johnson & Johnson, Wells Fargo, General Electric and Wal-Mart. Not to mention Alibaba, which only is valued at around $216 billion.

But even if Snapchat — a company that so far has yet to generate revenue — somehow becomes an Apple-like outlier, Yahoo still would not get the same bang because it’s putting in fewer bucks. Were Snapchat to hit the 51x mark, its investment would be worth just over $1 billion. That’s a phenomenal return on relatively little risk, but wouldn’t give future Yahoo anywhere near the financial flexibility that current Yahoo received from Alibaba.

Yahoo’s anticipated investment in Snapchat raises a lot of questions. But one certain answer is that it will not be Alibaba, The Sequel.

• Next Act: Andy Miller has quietly launched a new company called Remix Capital, which already has raised an undisclosed amount of seed funding from CRV, Highland Capital Partners and individual angels. Miller will serve as chairman, while longtime collaborator Avi Dabir will serve as CEO.

For the uninitiated, Miller is the former founder and CEO of Quattro Wireless, which was acquired by Apple in 2009 for $275 million. He then became Apple's mobile ad chief, before leaving two years later to become a Silicon Valley-based partner with Highland. Miller later would go on to serve as president of Highland portfolio company Leap Motion, before leaving earlier this year. 

Now comes Remix. Miller is keeping details close to the vest, but a source familiar with the company says that it is "focused on next-generation tools for making memes."

• LP pick fail: Each year during its annual LP meeting, Atlas Venture asks several of its portfolio companies to give a brief elevator pitch from the stage. It then has its limited partners vote for their favorite, with the "winner" receiving a small prize like pizza and beer on a Friday night.

After four years of this exercise, one thing is becoming evident: The folks who pick VC funds aren't always great at picking startups.

Take 2011, when the LPs put InsightSquared in last place. The provider of cloud-based sales and marketing analytics is rumored to have been valued at around $100 million after raising its Series B round this past summer, and now has more than 100 employees. Among the company that got more votes were a pair that since have been acqui-hired for virtually no return. One year later, the last-place finisher was Bit9, which is said to be considering a 2015 IPO (in the LP's defense, the winner that year was Veracode). 

For the record, the last-place company this year was brand loyalty startup InMoji... so expect big things from them in the future.

• #GetLiquid: I'm pleased to announce that TriplePoint Capital has signed on as a sponsor for our sold-out Liquidity Event in San Francisco, which takes place in two weeks from tonight. It joins fellow sponsors Preqin, NEA, Gunderson Dettmer, Andreessen Horowitz. Can't wait to hang out with 700+ of you soon...

THE BIG DEAL

• IBM (NYSE: IBM) has resumed talks to sell its chip-manufacturing unit to Globalfoundries Inc., according to Bloomberg. Discussions had broken down in July after IBM offered Globalfoundries $1 billion to take on the money-losing business. Read more.

VENTURE CAPITAL DEALS

• SolidFire, a Boulder, Colo.-based provider of all-flash storage systems, has raised $82 million in Series D funding. Greenspring Associates led the round, and was joined by return backers NEA, Novak Biddle, Samsung Ventures and Valhalla Partners. www.solidfire.com

• Blockchain, a UK-based Bitcoin wallet provider, has raised $30.5 million in new VC funding co-led by Lightspeed Venture Partners and Wicklow Capital. Read more. 

• Jobvite, a San Mateo, Calif.-based provider of recruiting software, has raised $25 million in Series D funding. Catalyst Investors led the round, and was joined by return backers CMEA, ATA Ventures and Trident Capital. www.jobvite.com

• MiniLuxe, a Newton, Mass.-based startup nail salon chaion, has raised $23 million in Series C funding. Horowitz Group led the round, and was joined by Cue Ball Capital, Murano Group, Silverado, Beechwood Capital, Valley Oak and Nicholas Negroponte. Read more. 

• Magnus Life Science, a London-based developer of therapeutics based on a “core understanding of blood flow,” has raised £15.5 million in seed funding from an unidentified “private equity investor.” www.magnuslifescience.co.uk

• Frankly, a San Francisco-based mobile messaging app, has raised $12.8 million in new VC funding from JJR Private Capital, Stanford-StartX Fund and SK Planet. www.franklychat.com

• Comply365, a Beloit, Wis.-based developer of enterprise mobility solutions for airlines and other industries, has raised $12 million in new VC funding led by Drive Capital. www.comply365.com

• Eversight, a Palo Alto, Calif.-based provider of promotion optimization software for consumer goods companies and retailers, has raised $9.7 million in Series A funding from Emergence Capital Partners. www.eversightlabs.com

• Cardiac Dimensions, a Kirkland, Wash.-based developer of minimally-invasive treatment modalities to address heart failure and related cardiovascular conditions, has raised $8.5 million in new VC funding led by Arboretum Ventures. This brings its latest round to $28.5 million, including an earlier close co-led by M. H. Carnegie & Co. and Lumira Capital. www.cardiacdimensions.com

• Curbside, a Palo Alto, Calif.-based, has raised $8 million in Series A funding. Index Ventures led the round, and was joined by AME Cloud Ventures, OATV, Innovation Endeavors, Chicago Ventures, TenOneTen, WGI Group and individual angels like Sue Decker. www.shopcurbside.com

• BloomNation.com, a Santa Monica, Calif.-based online marketplace for hand-crafted, locally-delivered flowers, has raised $5.55 million in Series A funding. Backers include Ronny Conway, Andreessen Horowitz, Spark Capital and Chicago Ventures. www.bloomnation.com

• Atopix Therapeutics Ltd., a UK-based developer of antagonists for allergic disease, has raised an undisclosed amount of new VC funding from SR One. www.atopixtherapeutics.co.uk

PRIVATE EQUITY DEALS

• Clearlake Capital Group has acquired AmQuip, a Trevose, Penn.-based provider of crane rental and related services, from an investor consortium that includes Altpoint Capital Partners. No financial terms were disclosed. www.amquip.com

• Genstar Capital Group has agreed to acquire and merge iSqFt (Cincinnati) and BidClerk (Chicago), two providers of project data, analytics and software tools to the construction industry. No financial terms were disclosed. www.genstarcap.com

• Kohlberg Kravis Roberts & Co. has agreed to acquire two French power plans from Austria’s Verbund for approximately €150 million. Read more. 

• Rock Hill Capital Group has sponsored a majority recap of Rail Service & Logistics LLC, a railroad services provider focused on the removal and disposal of wooden railroad ties. No financial terms were disclosed. www.rockhillcap.com

• Team Oil Tools Inc., a The Woodlands, Texas–based portfolio company of Intervale Capital, has acquired the assets of Schlehuber Oil Tools LLC, a Denver City, Texas-based provider of downhole tools servicing the Permian Basin. No financial terms were disclosed. www.teamoiltools.com

• TPG Capital approached British grocery chain Tesco PLC (LSE: TSCO) about buying its Dunnhumby data collection and analytics subsidiary, according to Sky News. Its initial bid for the business was rejected, but it reportedly remains interested. Dunnhumby could be valued at around £2 billion. www.dunnhumby.com

IPOs

• INC Research Holdings, a Raleigh, N.C.-based contract research organization for the biopharma and medical device industries, has filed for a $150 million IPO. It plans to trade on the Nasdaq under ticker symbol INCR, with Goldman Sachs and Credit Suisse serving as lead underwriters. The company reports $13.8 million in net income on $552.5 million in revenue for the first half of 2014, compared to a $27.4 million net loss on $482 million in revenue for the year-earlier period. Shareholders include Avista Capital Partners and the Ontario Teachers’ Pension Plan. www.incresearch.com

• Social Finance Inc. (SoFi), a San Francisco-based student lending solution, is planning to file early next year for an IPO that would raise between $200 million and $250 million, according to comments CEO Mike Cagney made to the WSJ. SoFi has raised over $160 million in VC funding from firms like Baseline Ventures, DCM, Renren, Thomvest Ventures and QED Capital. Read more. 

• Virobay Inc., a Menlo Park, Calif.-based drug developer focused on neuropathic pain, autoimmune diseases and fibrosis, has set its IPO terms to around 3.85 million shares being offered at between $12 and $14 per share. It would have an initial market cap of approximately $169 million, were it to price in the middle of its range. The company plans trade on the Nasdaq under ticker symbol VBAY, with Piper Jaffray and JMP Securities serving as lead underwriters. Shareholders include TPG Biotech (28.6% pre-IPO stake), Sutter Hill Ventures (27.4%), Alta Partners (26.3%) and AbbVie (16.4%). www.virobay.com

EXITS

• Cardtronics Inc. (Nasdaq: CATM) has completed its previously-announced $160 million acquisition of Welch ATM from Rock Island Capital. www.cardtronics.com

• Waste Management Inc. (NYSE: WM) has agreed to acquire Kansas City-based refuse company Deffenbaugh Disposal Inc. from aPriori Capital Partners (f.k.a. DLJ Merchant Banking Partners). No financial terms were disclosed. www.deffenbaughinc.com

OTHER DEALS

• Boku, a San Francisco-based provider of online mobile payment solutions, has acquired German rival Mopay for an undisclosed amount. Boku has raised over $70 million in VC funding from Andreessen Horowitz, Benchmark Capital, DAG Ventures, Index Ventures, Khosla Ventures, NEA and Telefonica Digital. Read more. 

•Fortum (Helsinki: FUM1V) is planning to launch an auction for its Swedish power grid later this month, according to Reuters. The deal could be valued at around €6 billion, with Citi and Danske Bank managing the process. Read more. 

•Hewlett-Packard (NYSE: HPQ) has sold its 40% stake in Injazat Data Systems, a UAE provider of IT and data center services, to Abu Dhabi investment firm Mubadala. No financial terms were disclosed. www.injazat.com

•Hilton Worldwide (NYSE: HLT) has agreed to sell the Waldorf Astoria hotel in midtown Manhattan to China’s Anbang Insurance Group for $1.95 billion. Read more. 

•Lincoln Electric Holdings Inc. (Nasdaq: LECO) has acquired EASOM Automation Systems Inc., a Madison Heights, Mich.-based maker of handling systems for large components used in vehicular and aerospace assembly plants. No financial terms were disclosed. www.easomeng.com

•Occidental Petroleum Corp. (NYSE: OXY) is seeking to sell around 335,000 net drilling acres in North Dakota’s Williston Basin for upwards of $3 billion, according to Bloomberg. Tudor Pickering Holt & Co. is managing the process. Read more. 

•Rio Tinto PLC (NYSE: RIO) has rejected a merger approach from Glencore Xstrata PLC (LSE: GLEN) that would have formed the world’s largest mining company. Read more.

•Postmedia Canada Network (TSX: PNC) has agreed to acquire the Sun Media portfolio of 175 small-city daily newspapers and tabloids from Quebecor Media Inc. (TSX: QBR) for around C$301 million. Read more. 

FIRMS & FUNDS

• No firm or fund news this morning.

MOVING IN, UP, ON & OUT

• Anil Gorthy and Dan Galanter have joined Avenue Capital Group as senior portfolio manager and senior managing director of the firm’s Asia strategy group, which focuses on investments in distressed and undervalued debt of Asian companies. Gorthy previously was a Hong Kong-based partner with PAG, while Galanter spent the past six years as PAG’s head of business development. www.avenuecapital.com

• Larry Handen has joined Macquarie Capital as a senior managing director of the Australian firm’s U.S. principal transactions group. He previously was a managing director with Insight Venture Partners. www.macquarie.com

• Duncan Niederauer, former NYSE CEO, has joined fundraising and advisory firm Battery East as a managing director. Read more.

• Zavain Dar has joined VC firm Lux Capital as a Palo Alto-based senior associate. He previously was with Innovation Endeavors. www.luxcapital.com

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