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Term Sheet — Thursday, March 5

Random Ramblings

I’ve got a confession to make: Over the years, I’ve written some emails and other electronic messages that would not paint either my colleagues or my employer in a flattering light. At least a few of them would reflect poorly on me as well.

Read out of context, these messages (and their replies) would suggest organizational dysfunction. Read in context, they’d reflect that disagreements and personality conflicts can arise even in the strongest of corporate cultures. The best of friends sometimes fight.

I bring all of this up after reading coverage of the big gender discrimination case currently playing out in San Francisco, pitting interim Reddit CEO Ellen Pao against her former employers at venture capital firm Kleiner Perkins Caufield & Byers.

Much of it describes Kleiner Perkins as a place where you wouldn’t want to work. Lots of arguments, rivalries and ambiguous performance evaluation (both formal and informal). Almost all of it has been sourced to contemporaneous electronic messages, many of which have been read aloud by their authors from the witness stand. It’s not Amy Pascal-level stuff, but it’s still not good.

The more you hear, the less you can imagine that Kleiner Perkins has managed to stay in business for five minutes, let alone 43 years. And plenty of its rivals have been privately reveling in such sentiment.

To be clear, few of the embarrassing emails are explicitly germane to Pao’s gender discrimination or retaliation charges. They’re just the type of collateral evidence that emerges in the margins of most any jury trial. And my strong belief is that other organizations — venture capital firms, media companies, etc. — would be experiencing something similar, were their electronic message archives to be put on public display.

It’s why I had presumed that Kleiner Perkins would find some way to settle with Pao before heading to court. Even if Pao was determined to make it exceptionally expensive or otherwise difficult (there are all sorts of rumors about what KPCB offered during settlement talks, but all we really know is that it wasn’t enough). How much was safeguarding its reputation worth? Did Kleiner Perkins not fully grasp that even if it wins, it still loses?

Or did the firm ultimately put a bit of faith in this notion that everyone would recognize something of their own workplace experience in those emails, and thus give Kleiner Perkins a pass? If so, it was a miscalculation. In just two short weeks, Kleiner Perkins has seen its brand decay from grand to gauche.

No matter the jury’s verdict, Kleiner Perkins will be forced to profess its competence to investors, entrepreneurs and journalists. Each of them (us) will treat the efforts with skepticism. After all, our own emails are secure. For now.


• Madison Dearborn Partners has agreed to sell Ikaria Inc., a Hampton, N.J.-based maker of equipment for critically ill patients, to Mallinckrodt PLC (NYSE: MNK) for around $2.3 billion.

Madison Dearborn bought a majority stake in Ikaria just over a year ago at an enterprise value of $1.6 billion, from an investor consortium that retained a 45% position. That minority group included New Mountain CapitalArch Venture PartnersVenrock and 5AM Ventures.


• Tricida Inc., a South San Francisco-based developer of therapeutics for chronic renal disease, has raised $30 million in Series B funding. OrbiMed Advisors led the round, and was joined by Sibling Capital Ventures and Limulus Venture Partners.

• HoneyBook, a San Francisco-based invite-only service for event professionals, has raised $22 million in Series B funding. Norwest Venture Partners led the round, and was joined by Aleph and Hillsven.

• Aura Biosciences, a Cambridge, Mass.-based developer of nano-enabled drug delivery systems, has raised $21 million in Series B funding. Advent Life Sciences led the round, and was joined by Henri Termeer, LI-COR Biosciences, Chiesi Ventures, Ysios Capital and Alexandria Venture Investments.

• First Insight, a Sewickley, Penn.-based provider of predictive analytic consumer testing solutions, has raised $14 million in new VC funding led by Updata Partners.

• Terralux Inc., a Longmont, Colo.-based provider of LED solutions for building owners, has raised $11 million in growth equity funding. EnerTech Capital led the round, and was joined by Crawley Ventures, Emerald Technology Ventures and GC&H Investments.

• MindMaze, a Swiss developer of a neurotechnology engine for the gaming and healthcare sectors, has raised $8.5 million in VC funding from undisclosed investors.

• TriLumina Corp., a Santa Fe, N.M.-based provider of an illumination solution for automotive laser radar and sensing platforms, has raised $8.5 million in Series A funding. Stage 1 Ventures was joined by return backers Cottonwood Technology Fund and Sun Mountain Capital.

• Salesfusion, an Atlanta-based provider of cloud marketing automation software, has raised $5 million in new VC funding. Return backers include Noro-Moseley Partners and BLH Venture Partners. In other company news, Salesfusion has named former RedPrairie executive Carol O’Kelley as its new CEO.

• Culture Amp, a San Francisco-based “people analytics” platform, has raised $6.3 million in Series A funding from Felicis Ventures, Index Ventures and Blackbird Ventures.

• Geofeedia, a Chicago-based provider of location-based social media intelligence solutions, has raised $3 million in second-round funding led by existing backer Hyde Park Venture Partners.

• The Luneau Technology Group, a French maker of ophthalmic diagnostic products, has raised an undisclosed amount of new funding from MML Capital Partners and return backers BNP Paribas, Amundi and Credit Agricole.


• The Carlyle Group and Warburg Pincus have completed their previously-announced acquisition of Toronto-based credit rating agency DBRS Ltd. No financial terms were disclosed, although sources have confirmed earlier media reports that the purchase price was north of US$500 million. Also participating in the buyout group were DBRS management and company founder Walter Schroeder.

• CVC Capital Partners has acquired Wireless Logic, a UK–based machine-to-machine managed services provider. No financial terms were disclosed, except that the deal was supported by a £75 million financing package from Ares Management and GE Capital.

• Emerald Expositions LLC, a San Juan Capistrano, Calif.-based trade show operator owned by Onex Partners, has acquired several tradeshow and conference brands in the healthcare and senior living design market from Vendome Group LLC. No financial terms were disclosed.

• Gridiron Capital has recapitalized existing portfolio company Performance Health and Wellness Holdings, an Akron, Ohio-based provider of rehabilitation and wellness products. No financial terms were disclosed, except that Golub Capital arranged the debt financing,

• MB Funds has agreed to acquire Kotkamills Oy, a Finnish maker of specialty papers and wood-based products, from OpenGate Capital. No financial terms were disclosed.

• Motion Solutions, an Aliso Viejo, Calif.-based distributor of linear motion and motion control solutions, has raised an undisclosed amount of private equity funding from North Branch Capital. The deal also included leveraged financing from First American Bank.


• Etsy Inc., a Brooklyn-based online marketplace for handmade items, has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker symbol ETSY, with Goldman Sachjs serving as lead underwriter. The company reports a $15.2 million net loss on nearly $109 million in revenue for 2014, compared to a net loss of less than $1 million on $78.5 million in revenue for 2013. The company has raised in VC funding, from firms like Accel Partners (27% pre-IPO stake), Union Square Ventures (15.2%), Index Ventures (12.8%), Tiger Global Management (7.3%), Manatt Venture Fund, Huburt Burda Media, Acton Capital Partners and Glynn Capital Management. Etsy CEO Chad Dickerson holds just a 2.1% position. Read more.


• IBM (NYSE: IBM) has acquired AlchemyAPI, a Denver-based natural language processing service. No financial terms were disclosed. AlchemyAPI had raised $2 million from Access Venture PartnersRead more.

• Recruit (Tokyo: 6098) has agreed to acquire Quandoo, a Berlin-based restaurant reservation platform, for around $219 million. Quandoo has raised nearly $40 million in VC funding from firms like Holtzbrinck Ventures and DN Capital, Texas Atlantic Capital and Piton Capital. Read more.

• SunEdison Inc. (NYSE: SUNE) has acquired Solar Grid Storage, a Philadelphia-based provider of PV energy storage systems. No financial terms were disclosed. Solar Grid Storage has raised VC funding from Ben Franklin Technology Partners. Read more.

• Z Capital Partners has hired Stifel Financial to find a buyer for Famous Brands International, owner of the Mrs. Fields cookie and TCBY frozen yogurt brands, according to the WSJ. The deal could be worth between $175 million and $225 million. Read more.


• AbbVie (NYSE: ABBV) has agreed to acquire Pharmacyclics (Nasdaq: PCYC), a Sunnyvale, Calif.-based drugmaker whose products focus on oncology and immune-mediated diseases. The deal is valued at approximately $21 billion in cash and stock, or the equivalent of $261.25 per share (20.52% premium over yesterday’s opening price). Read more.

• Citigroup has sold its 9.9% stake in Turkey’s Akbank for approximately $1.16 billion. Read more.


• Five Arrows Principal Investments, the private equity unit of Rothschild Merchant Banking, has held a €508 million first close for its second fund. The target size is €700 million.

• HGGC has closed its second private equity fund with $1.33 billion in capital commitments.

• SaaS Capital, a provider of debt-based growth capital for SaaS companies, has closed its second fund with $58 million in capital commitments.


• William Detwiler has joined United Safety as chief investment officer. He previously spent two years as a senior advisor to Three Ocean Partners and, before that, was a senior managing director and co-head of consumer, retail and healthcare investment banking with FBR Capital Markets.

• John Sawin has joined Evercore Wealth Management as a San Francisco-based vice president and financial advisor. He previously spent five years in the tech investment banking group of Barclays.

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