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Term Sheet — Friday, May 19


I want to highlight a portion of Adam Lashinsky’s book about Uber. excerpted by Fortune here and quoted on our latest cover, where CEO Travis Kalanick discusses Uber’s narrative arc from media darling to media villain, and Kalanick’s role in it:

[Kalanick] ascribes his moments of pique to “fierce truth seeking.” Someone willing to say exactly what he thinks, empathy be damned, will be judged harshly. He’s not alone. It’s a trait that has been repeatedly ascribed to Steve Jobs and Jeff Bezos, as well as to Kalanick’s contemporary, Elon Musk. Kalanick is aware of this, referring to the “meme that founder-CEOs have to be assholes to be successful.” He rejects that notion, but he’s obviously just short of obsessed by it.

“I think there’s this question out there,” he says, shifting away from general memes to himself. “‘Is he an asshole?’ Since you’ve spent time with me, one of the big questions you’re going to get is, ‘Is he an asshole?’ ”

Engineer that he is, Kalanick wants to believe there is a scientific answer to the question. I suggest the answer is and always will be in the realm of opinion, not fact. He rejects this. “Understanding whether it’s real or not, like do I trigger something in certain people that’s related to something that I didn’t do? Or am I an asshole? I’d love to know.” He continues: “I don’t think I’m an asshole. I’m pretty sure I’m not.”

THIS OUT LOUD SELF-REFLECTION, from the CEO of the world’s most valuable venture-backed startup, reflects a question the wider Silicon Valley ecosystem is asking with itself right now. Are we the worst? Is it our fault the world hates us? Or is this everyone else’s fault? Probably just everyone else. Back to the doomsday bunker!

Several people pointed out on Twitter yesterday: If you have to ask if you’re an a**hole… you probably are. And also: Most a**holes don’t think they are. The real question for Kalanick, and the broader tech community grappling with issues of ethics, toxic culture, and a lack of diversity, is whether they’re going to do anything about it, or they just wait for the latest scandal to blow over and go back to their jerk ways.

Months ago, when Uber’s sexual harassment and discrimination scandal first cracked open, Kalanick struck a conciliatory tone and promised a full and speedy investigation by the end of April. That’s been delayed. Kalanick cancelled his conference appearance, and his surrogates have been pushing a story of a new, nicer Travis.  I hope the passage of time, the proliferation of new scandals to worry about, and some slick PR maneuvering don’t let Kalanick off the hook. Fixing this mess has ramifications for the entire tech community.

ON THE OTHER SIDE OF THE SPECTRUM, we have Etsy, a company conceived to be an altruistic do-gooder-y platform of community ideals. Etsy became a certified B Corp. in 2012 as a way to formally hold itself accountable to its corporate principles. For years the company talked about doing a reverse IPO or some other kind of creative transaction to return money to investors and employees without becoming a slave to fiduciary duty. In the end, it went public the regular way in 2015.

Etsy is likely regretting that choice now. Activist shareholders and TPG have attacked, successfully replacing the company’s CEO and winning cost-cutting measures. Max Chafkin and Jing Cao of Bloomberg have published a great story on the saga titled “The Barbarians Are at Etsy’s Hand-Hewn, Responsibly Sourced Gates.” A notable tidbit: Etsy will likely have to give up its status as a B Corp.

What does Etsy’s struggle to operate according to its ideals – the way its leadership, customers and employees want it to — mean for other idealistic companies? Plenty of promising IPO-bound startups, including Airbnb, have a similar ethos. The Honest Co. and Casper are both B Corps., according to Bloomberg.

What’s more, the idea of corporate social good and a “double bottom line” is increasingly popular at Fortune 500 companies, with conglomerates from General Electric to Coca-Cola touting their world-changing initiatives like clean tech and micro-financing for female entrepreneurs. Beyond the actual results, these kinds of efforts serve as a recruiting tool, a PR boon, and for employees, a salve against soul-sucking Office Space-style corporate drudgery.

Etsy’s situation sends a message that, hey, those things are fine, so long as they don’t distract from the company’s core priority of profits, and also, profits. Did we mention profits?

This is a choose your own devil situation: Blame Sarbanes-Oxley and short-term quarterly earnings demands, blame the activist shareholders, blame venture investors, blame the Etsy hipsters and their expensive “community loom,” or more generally blame too-big, slow-moving incumbents and too-big, slow-moving government. (I’ve learned that Term Sheet’s readership is quite sensitive to any critique of capitalism, so I won’t dare flirt with that line of thinking.) Chafkin offered a cutting, cynical, and true summary on Twitter: “If you take money from professional investors, your good intentions don’t matter that much.”

BUT LET’S NOT END THE WEEK on a cynical note. The weather in New York has hit that fleeting, once-a-year moment of perfection, just before the face-melting OH MY GOD BLAST THE A.C. heat wave of horror arrives. If you’re stuck inside, here’s a cool site full of calming mood videos. Have a great weekend!


• How AI is changing your job hunt.

• Emmanuel Macron’s plan to save France and the Euro.

• What happens next with net neutrality.

• Jim Chanos believes the markets are already pricing in President Pence.

• Bitcoin hits another record, gains almost $4 billion this week.

• U.S. could finally get paid family leave under Trump’s new budget proposal.

• Salesforces’ doing good and doing well.

• President Trump is causing more economic uncertainty than the 2008 financial crisis.


Miles of ice collapsing into the sea. Roger Ailes’ lasting legacy for women. The startup that went down under: The rise and fall of 1-Page. Are you prepared for another global cyberattack? The dysfunctional origins of Juicero. The Financial Times fact-checks the Martin Shkreli musical. Alex and Ani’s American jewelry empire. Not-great work conditions at Tesla.


One97 Communications, an India-based telecommunications provider and owner of online marketplace Paytm, has announced that it raised $1.4 billion from SoftBank Group, confirming previous reports. Read more.

EAT Club, a Sunnyvale, Calif.-based corporate lunch delivery service company, raised $30 million in Series C funding. Sodexo led the round. Existing investors August Capital and Trinity Ventures participated.

Fullstory, an Atlanta-based software startup, raised $15 million in Series B funding. GV led the round, and was joined by Salesforce Ventures. The company is now valued at approximately $100 million. Read more.

Slice, a New York-based pizza-ordering platform, raised $15 million in Series B funding. GGV Capital led the round. Existing investor Primary Ventures participated.

Affinity, a San Francisco-based network management software company, raised $13.5 million in funding, according to TechCrunch. 8VC led the round, and was joined by Sway Ventures, Pear Ventures, Great Oaks Venture Capital, and Western Technology Investment. Read more.

Dor, a San Francisco-based foot traffic counting and analytics platform, raised $3.8 million in seed funding. Zetta Venture Partners and Vertex Ventures co-led the round.

Minibrew, a Netherlands-based beer brewing machine manufacturer, raised €2.45 million ($2.72 million) in seed funding, according to An unnamed investor led the round, and was joined by Hoving & Partners SA and VOC Capital Partners. Read more.

Precognitive, a Chicago-based fraud prevention technology developer, raised $1.25 million in seed funding. Corazon Capital led the round, and was joined by Flybridge Capital Partners, Hyde Park Ventures, and Jeff Liesendahl.

OppSource, a St. Paul, Minn.-based SaaS-based software provider, raised $1.22 million in funding. Next Frontier Capital led the round.


Iterum Therapeutics, a Dublin, Ireland-based clinical-stage pharmaceutical company, raised $65 million in Series B funding. Arix Bioscience led the round, and was joined by Pivotal bioVenture Partners, Advent Life Sciences, Domain Associates and Bay City Capital. Existing investors including Frazier Healthcare Partners, Canaan Partners, Sofinnova Ventures, and New Leaf Venture Partners participated.

Xontogeny, a Boston-based life sciences accelerator operating company, raised $15 million tranche of a $25 million Series A financing. Investors include Perceptive Advisors.


• Private equity fund PAI Partners has put its majority stake in ADB Safegate, a Belgium-based airfield visual guidance company, up for sale, according to Reuters. The company is valued at around 700 million euros ($778 million). Read more.

Starwood Capital has put Baccarat (ENXTPA:BCRA), a Paris-based crystal manufacturer, up for sale, according to Reuters. Baccarat is valued at approximately 200 million euros ($223.16 million). Read more.

B. Riley Financial (Nasdaq:RILY) has agreed to acquire Wunderlich Securities, a Memphis, Tenn.-based brokerage firm, for $67 million.

ClearLight Partners has acquired a majority stake in Moore Landscapes, a Northbrook, Ill.-based provider of landscape installation, maintenance, and snow services. Financial terms weren’t disclosed.



Broadcom and a group led by KKR are emerging as the two leading bidders for the semiconductor unit for Toshiba Corp (TSE:6502), according to Bloomberg. Broadcom is reportedly offering about 2.2 trillion yen ($20 billion), while KKR’s group plans to offer approximately 1.8 trillion yen ($16 billion). Read more.

Grupo Lala is the lead bidder for Stonyfield Farm, the U.S. organic yogurt unit of Danone (ENXTPA:BN), according to the Wall Street Journal. Another bidder reportedly offered $850 million for the company. Read more.

Pallinghurst Resources (JSE:PGL), the largest shareholder of London-based precious stones miner Gemfields (AIM:GEM), offered to purchase the remaining 52.91% it does not already own for about 111.9 million pounds ($145.2 million), according to Reuters. Read more.

Julius Baer (SWX:BAER) is in advanced talks to buy a 20% minority stake in TPCG Group, an Argentina-based financial services company, according to Reuters. Read more.

• Spotify acquired Niland, a Paris-based AI music analysis tech startup. Financial terms weren’t disclosed.


Kinder Morgan, an energy giant based out of Houston, Texas, is currently facing opposition from Greenpeace over its proposed IPO. The company planned to debut in Canada to finance its Trans Mountain Expansion Project. But the Alberta Securities Commission is now reviewing Greenpeace’s request to halt the $1.28 billion IPO. Greenpeace alleges that Kinder Morgan quoted outdated figures in its filings.

Aston Martin, a London-based luxury carmaker, is reportedly considering an IPO in the U.K. as early as 2018, Bloomberg reported. Though the company has also been thinking about an IPO as early as 2011.

Constellation Alpha Capital, a “blank check” company based out of West Palm Beach, Fla., filed for an IPO Thursday that it says will raise up to $125 million. The SPAC, formed to acquire an Indian healthcare company, is led by Pipavav Defense & Offshore Engineering Company’s former CEO, Rajiv Shukla. The firm is 100% backed by Centripetal, a firm where Shukla is a managing member. The company plans to list on the Nasdaq under “CNACU.” Cowen and Company is lead underwriter in the deal. Exact terms of the deal have not yet been disclosed.

Petroshare, an Englewood, Colo.-based energy company, re-filed for an IPO early Friday. The company says it hopes to raise up to $50 million with Johnson Rice & Company and Seaport Global Securities as underwriters. The company posted revenue of $333,116 on loss of $4.4 million for 2016. Exact terms of the deal have yet to be disclosed. Petroshare currently trades on the OTC markets as “PRHR” at $1.94 a share, and hopes to list on the NYSE under the same ticker.

ShotSpotter, a Newark, Calif.-based company making gunshot detection software, set the terms for its IPO Thursday. The company hopes to offer 2.8 million shares between $10 to $12 a piece. At the range’s midpoint, ShotSpotter would raise $30.8 million. The company announced revenue of $15.5 million for 2016 on net loss of $6.9 million. ShotSpotter is backed by Lauder Partners(37.4% pre-offering), Motorola Solutions(15.6%), Claremont Creek Ventures(11.3), and RT Groos(10%). Roth Capital Markets leads the underwriting for the company, which plans to trade on the Nasdaq under “SSTI.”


Ares Management has agreed to acquire Deva Holdings, the parent company of New York City-based hair care brand DevaCurl. The sellers include Tengram Capital. Financial terms weren’t disclosed.

Deutsche Beteiligungs is selling its stake in ProXES Group, a Germany-based food processing machinery manufacturer, to Capvis Equity Partners. Financial terms weren’t disclosed.

Boyd Corporation, a portfolio company of Genstar Capital Management, has acquired Aavid Thermalloy, a Laconia, N.H.-based provider of thermal management solutions. The seller was Audax Private Equity. Financial terms weren’t disclosed.

Apax Partners has agreed to acquire Safetykleen Europe, a London-based provider of surface treatment and chemical application services. The seller is Warburg Pincus. Financial terms weren’t disclosed.


Fundamental Advisors, a New York City-based private equity firm, raised $993 million for its third fund, Fundamental Partners III.

Clarus Ventures, a Cambridge, Mass.-based venture capital firm, raised $789.7 million for its fourth fund. The fund’s target is $880 million.

Menlo Ventures, a Menlo Park, Calif.-based venture capital firm, raised $450 million for its 14th fund, Menlo Ventures XIV.

Whitehorse Liquidity Partners, a Canada-based private equity firm, raised $400 million for its debut fund, Whitehorse Liquidity Partners Fund I.

Akkadian Ventures, a San Francisco-based venture capital firm, raised more than $118 million for its fourth fund, Akkadian Ventures IV.


High Road Capital Partners added Nicholas W. Martino as a partner and Eojin Lee as a vice president.

Mary Jo Wenmouth joined Capital Square 1031 as a managing director. Previously, she was at Silver Portal Capital.

Craig Goos joined GPB Capital as a managing partner and chief operating officer. Previously, Goos was at UBS Wealth Management.


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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.