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Term Sheet — Monday, February 6

THE S&P 496?

More $SNAP: Friday’s Term Sheet had a full rundown of the Snap S-1 filing. (Right here if you missed it.) Here are a few bonus tidbits:

• Joanna Coles, Snap’s sole female board member, makes far less money for her board seat than the other five male directors who are being paid, Fortune’s Valentina Zarya reports.

• Snap has one of the strictest vesting schedules for employee stock in the tech industry. That’s likely to slow the brain drain that typically happens at tech companies after they go public. Especially when you consider that, of the company’s 1,859 employees as of 2016, the majority of them (67%) joined the company in the last year.

• There’s a conspiracy theory floating around, based on Snapchat’s slowing user growth, that the IPO is a ploy to attract a last-minute acquisition bid. After the AppDynamics switcheroo, where Qatalyst shopped the company without even being formally engaged, it’s top of mind.

But most people I’ve spoken to are skeptical for a few reasons: One, CEO Evan Spiegel is not interested in selling. Just look at the meticulous, unprecedented governance structure he and his co-founder created to maintain control of the company. Two, the $25 billion price tag prevents most last-minute buyers from swooping in. Three, see point No. 1 and underline it. But just for posterity, of the companies with the cash to do such a deal, Apple has recently hinted it might do a big media acquisition.

• Not only do Spiegel and co-founder Robert Murphy have the ability to retain their control of Snap if they’re fired, they retain control for nine months after they die.

• Investment managers at some of the top U.S. pension funds are not happy about Snap’s no-vote shares. The Council of Institutional Investors sent a letter to Snap urging the company to reconsider its share structure.

The kneejerk defense here is “Don’t like it? Don’t buy.” But because companies of Snap’s size will be included in major stock indexes, many investors won’t be able to avoid it.

To be clear: The investors complaining would be passive shareholders anyway. But they believe this structure, which goes beyond what Google and Facebook did in their IPOs, sets a bad precedent. (“For every Google or Facebook, there is a Zynga or GoPro,” Anne Sheehan, director of corporate governance at Calstrs, told the Financial Times.)

It also begs the question of whether investors will ever be able to pick and choose which parts of index funds they want to own. (The S&P 500, minus Snap, for example.) It’s not the first time this idea has come up: After the Wells Fargo scandal, Howard Lindzon argued that fund managers like Vanguard should launch an “S&P 496” that excludes the scandal-prone banks.

• Lastly, Snap’s colorful description of why smartphones are so personal notes that “we eat, sleep, and poop with our smartphones every day.” Likely another S-1 first.

VC Deal: Two years after it was created, Desktop Metal, a 3D metal printing startup based in Burlington, Mass., is gearing up to take its first product into production. To do so, the company gathered up a giant pile of venture capital from a group of noteworthy strategic investors.

The company has raised $45 million in new venture funding from GV, BMW I Ventures and Lowe’s Ventures. The round values Desktop Metal at $305 million pre-money, up from its valuation of $100 million in April 2016. The company has now raised a total of $97 million. Other investors include NEA, Kleiner Perkins Caufield & Byers, Lux Capital, GE Ventures, Saudi Aramco, and Stratasys, a 3D printing company.

CEO Ric Fulop, founder of A123 Systems and former general partner at North Bridge Venture Partners, created the company alongside four MIT professors. Fulop says this round of funding will allow the company to enter mass production. “Our vision is to change the way people make stuff,” he says. “It’s a big vision and it requires resources to scale it up.”

Desktop Metal’s new investors are potential customers. BMW could use Desktop Metal’s printers for car parts; likewise Lowe’s for in-house products. Fulop said he was not at liberty to share the strategic reason for Alphabet’s interest (via GV, its venture capital arm). “The promise of 3d printing … is making things you couldn’t make any other way,” Fulop says. “Once you are able to reduce the cost and make it more accessible, it enables you to … speed up the product cycle.”

Performance: Chicago buyout firm Sterling Partners will not raise another fund, Term Sheet has learned. The $6 billion AUM firm sent a letter to its limited partners last week stating it would move to a deal-by-deal investment strategy. The firm’s single-LP Education Opportunity fund may be a model for future funds, according to the letter. Meanwhile, partners Danny Rosenberg and Garrick Rice plan to spin out their own healthcare-focused investment firm. peHUB (paywall) first reported on the shift.

The firm’s fourth and latest fund closed below its target in 2013 with $917 million in commitments. The prior fund, Sterling Capital Partners III, a 2007 vintage, had raised $1 billion.

Sterling Partners’ investor letter attributes the shift to macro factors including “increased competition weighing on returns, heightened regulatory and tax friction, and less flexibility.” But a source familiar with the situation explains that Sterling was likely unable to raise a new fund because of performance.

The firm’s first institutional private equity fund was solid, carrying a net IRR of 18% as of the third quarter of 2016, according to investor communications viewed by Term Sheet. But the firm’s second and third private equity funds had respective IRRs of just 3.6% and 7.9%, the result of 12 months of declines. Portfolio companies Adeptus Health and Prospect Mortgage have hurt the performance of fund three in recent quarters. Sterling assured investors it would continue to deploy and manage its latest fund. The firm did not respond to a request for comment.

Moving on: Neeraj Chandra has left Tiger Global Management after 13 years with the firm, Term Sheet has learned. Chandra led the firm’s equities investments in technology and consumer investments. A source familiar with the situation says Chandra is likely to launch his own investment fund, but there are no immediate plans in place.

THE LATEST FROM FORTUNE…

• Fortune Unfiltered podcast with Wayne Newton.

• Fortune’s Most Powerful Women OnStage podcast with Ellen Kullman, retired chair and CEO of Dupont.

• An abridged history of Snap Inc.

• Snap’s governance test.

• Google must turn over foreign emails; Uber must share its ride data with new York City.

• Canada courts tech workers.

…AND ELSEWHERE

The bizarre new YouTube trend. What Steve Bannon really wants. Elon Musk is all-in on Trump. The two men advising Trump on women in the workplace.  I work from home. Jawbone’s latest pivot. Generosity burnout.

VENTURE DEALS

Comprehend Systems, a Redwood City, Calif.-based provider of intelligence applications for clinical operations, raised $15 million in Series C funding. Eminence Capital led the round, and was joined by Sequoia Capital and Lightspeed Venture Partners.

TerrAvion, a San Leandro, Calif.-based provider of aerial imagery services for farmers, raised $10 million in Series A funding. Merus Capital led the round, and was joined by Promus Ventures, Initialized Capital, and 10x Group.

SubVRsive, an Austin, Texas-based virtual reality startup, raised $4 million in Series A funding. WPP led the round.

Jobaline, a Kirkland, Wash.-based engagement platform for hourly workers, raised $3.5 million in funding. Investors include Madrona Venture Group, Trilogy Equity Partners, Founder’s Co-op, and several angel investors

Virtualitics, a Pasadena, Calif-based platform that combines artificial intelligence, big data, and virtual reality to help users understand data, raised $3 million in seed funding from angel investors.

FM:Systems, a Raleigh, N.C.-based provider of workplace management software, raised an undisclosed amount in funding from Accel-KKR.

SCUF Gaming, a Norcross, Ga.-based manufacturer and seller of controllers and other accessories for video games, raised an undisclosed amount in funding from H.I.G. Growth Partners.

PRIVATE EQUITY DEALS

• Morgan Stanley Capital Partners invested in Fisher Container, a Buffalo Grove, Ill.-based manufacturer of plastic films and bags.

• Stonepeak Infrastructure Partners agreed to acquire a majority stake in Cologix, a Denver-based data center and interconnection solutions provider. Existing investors Columbia Capital and Greenspring Associates will retain their existing stakes in the company. Financial terms weren’t disclosed.

• Jamieson Laboratories, a Toronto-based manufacturer and marketer of branded vitamins, minerals and supplements backed by CCMP Capital Advisors, acquired Body Plus, a Scarborough, Canada-based manufacturer and marketer of natural health and sports nutrition supplements.

• Convergint Technologies,  a Schaumburg, Ill.-based provider of integration services for electronic security, fire safety, and building automation systems, acquired Post Browning, a Cincinnati-based provider of consultation, installation, and maintenance services for the retail banking industry. Convergint is a KRG Capital Partners portfolio company.

• StackPath, a Dallas-based cybersecurity company, acquired Highwinds, a content delivery network specialist. StackPath raised nearly $180 million in funding, including $150 million from ABRY Partners. Read more at Fortune.

• Eastern Outfitters, a Meriden, Conn.-based holding company whose brands include Bob’s Stores and Eastern Mountain Sports, filed for bankruptcy protection. Sports Direct International (LSE:SPD) is considering a stalking-horse bid in the company’s bankruptcy auction. Eastern Outfitters is owned by Versa Capital Management, which acquired the retailer last year when Eastern Outfitter’s former owner, Vestis Retail Group, filed for bankruptcy.

• Career Step, a Provo, Utah-based online provider of corporate training for the healthcare industry backed by Revelstoke Capital Partners, acquired the revenue capture and coding and documentation divisions from Panacea Healthcare Solutions, a St. Paul, Minn.-based provider of coding, compliance, technology and financial advice to healthcare providers.

Welsh, Carson, Anderson & Stowe has made an additional investment in Revel Systems, a San Francisco-based provider of point-of-sale technology. The firm is now the majority owner of the company, which it first backed in 2014.

OTHER DEALS

• Google (Nasdaq:GOOGL) has agreed to sell Terra Bella, its satellite unit, to Planet Labs, a San Francisco-based satellite imaging company. Financial terms weren’t disclosed. Google bought Terra Bella (then called Skybox) in 2014 for $500 million. Read more at Fortune.

• Hudson’s Bay Co. (TSX:HBC) is in early-stage talks with Macy’s (NYSE:M) to acquire the company, according to report by Bloomberg. Read more.

Klarna, a Stockholm-based online payment company, acquired BillPay, a Berlin-based provider of online payment options for retailers, from Wonga, a London-based provider of short-term credit and financing services for businesses (the company was accused of issuing predatory loans in 2012). Terms weren’t disclosed, but a report by Sky News values the deal at £60 million ($74. 8 million). Read more.

EXITS

• Stratoscale, an Israeli developer of distributed operating systems for data centers, acquired Tesora, a Cambridge, Mass.-based database-as-a-service company. Financial terms weren’t disclosed. Tesora raised $13.2 million in VC funding, according to Pitchbook, from investors including Rho Canada Ventures, General Catalyst Partners, and CommonAngels.

• Nextdoor, a San Francisco-based social networking site for neighborhoods, acquired Streetlife, a London-based social network that connects local residents and businesses. Streetlife raised $1.69 million in VC funding, according to Pitchbook. Investors include Archant Digital Ventures and Social Discovery Ventures.

• Avery Dennison (NYSE:AVY) agreed to buy Yongle Tape Company, a Chinese manufacturer of PSA products and insulation tapes, from the company’s management and ShawKwei & Partners for $190 million, with an additional $55 million in performance-related incentives.

FIRMS + FUNDS

Promus Ventures, a Chicago-based VC firm that typically makes investments between $500,000 and $1 million, raised $14.7 million for its second fund, according to an SEC filing.

PEOPLE

• Josh Miller has joined Thrive Capital as an entrepreneur-in-residence. Previously, Miller was a member of President Barack Obama’s White House Office of Digital Strategy.

Vestar Capital Partners has promoted John Stephens to co-head of the firm’s Business Services and Industrial Products Group, Ben Funk to vice president, and Jonathan Williams to senior associate.

• Rashaun Williams has joined Manhattan Venture Partners as a general partner of the MVP All-Star Fund. Previously he was a founding partner at Queensbridge Venture Partners.

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