fund

Open source zigs in a zagging VC market

Over the past year, the open-source business community has collectively donned a hair shirt over stumbles in venture funding, especially when venture funding in open-source companies took an apparent 12 percent slide in the third quarter of 2008.

However, while the second half of 2008 saw declines in open source-related venture funding, overall, funding levels were 35.5 percent higher than in 2007, according to The 451 Group.

This is pretty amazing, when you consider that overall U.S. venture capital investments plummeted 8 percent over 2007 funding levels, as TechCrunch reports.

And if you treat Washington state as a … Read more

Venture capital plummets 71 percent

Hey buddy, can you spare a dime?

Venture capitalists put a virtual lock on their funding during the fourth quarter, doling out a mere $3.4 billion, according to a report released Monday by Thomson Reuters and the National Venture Capital Association.

The meager performance pales in comparison to the $11.7 billion distributed to start-ups a year ago during the same period. That's a decline of 71 percent. Funding is down nearly 60 percent from the previous quarter.

During the fourth quarter, venture capitalists launched 33 follow-on funds and 10 new funds, resulting in a 3-to-1 ratio for … Read more

IT venture investing posts worst Q4 in a decade

Venture capital investments in IT companies plunged 40 percent to $2.18 billion in the fourth quarter, their worst level in a decade, according to figures released late Friday by VentureSource.

The data further confirms concerns entrepreneurs have already been raising about a funding pullback by VCs over the second half of the year and dire warnings by the VCs themselves, such as Sequoia Capital's infamous R.I.P. PowerPoint presentation.

IT Venture capital dropped to $11.64 billion for all of 2008, down 14.5 percent from the previous year, according to VentureSource. During the past year, IT … Read more

Marketcetera's lifeline to the hedge fund industry

This week Marketcetera announced general availability of its Marketcetera Automated Trading Platform, an open-source platform for hedge fund traders. I wrote last week about Marketcetera's seemingly odd timing, creating a trading platform for hedge funds just as they've fallen off a financial cliff.

But in talking further with Marketcetera's Roy Agostino, chief marketing officer, and Graham Miller, chief executive officer, I'm increasingly inclined to believe that the company couldn't have timed its market entry more perfectly.

Consider that the company's Web traffic is up over 300 percent since January 2008, suggesting growing interest in the company's products. More important to revenue, however, is the statistic that registrations (for white papers, etc.) are up over 400 percent year over year. These are people that have more than a passing interest in Marketcetera. They're potential buyers.

I asked the Marketcetera executive team what is driving the interest in its open-source trading platform, and heard three themes that resonate across the open-source spectrum:

Total cost of ownership. Hedge funds and the other large financial institutions are trying to drive down their costs, especially in the wake of the biggest financial meltdown since the Great Depression; Vendor lock-in. Agostino suggested that money managers are increasingly frustrated with being locked-in long-term to their Order Management System (OMS) vendors, especially when it's become common practice to demand hefty professional services fees just to make the proprietary OMS suitable to a hedge funds day-to-day requirements; Control and flexibility. Hedge funds view technology as a competitive differentiator, and many have discovered that proprietary OMS offerings simply don't give the flexibility to tweak the OMS to fit their requirements. Hence, they have developed their own OMS in order to get the flexibility they want, but open source gives them the ability to start with a robust platform and fine-tune the last 10 percent or so of their requirements.… Read more

$10 million to Yodle about

Yodle, a New York-based company that helps small businesses generate leads and power local advertisements, on Monday announced that it has raised a $10 million Series C funding round.

Led by Jafco Ventures, the round was completed with contributions from the Draper Fisher Jurvetson Growth Fund, and previous investors Draper Fisher Jurvetson and Bessemer Venture Partners.

The reason for raising the money? According to a release, it's because Yodle is growing fast and plans to expand further. At the end of 2008, the company had 250 employees and 5,000 customers, and reported 700 percent revenue growth from 2007.… Read more

Is now the right time for open source in hedge funds?

I've blogged about Marketcetera before, a cool open-source hedge fund trading platform. Later this week I'll be posting an update after I interview the Marketcetera team, but keep bumping into stories that make me wish the interview were today, not Thursday.

For example, Businessweek recently offered up an opinion piece from a San Francisco-based hedge fund trader, who argued for an open-source trading platform:

After headcount, a typical hedge fund's largest expense item is technology. Much of that expense goes to the trading systems that we use. Let me tell you a secret: Our "secret sauce&… Read more

VCs' focus on revenue could benefit open source

In a not-so-surprising turn of events, The New York Times reports that Silicon Valley venture capitalists actually care about revenue again.

After years of investing in Web 2.0 companies that generate eyeballs and weird brands but little revenue, VCs have decided that businesses that actually make money are a priority:

For Web sites that do not already have large audiences, "your business model may be just as plausible as it was 18 months ago, but we're all more cautious about giving you a slug of money," [Accel partner Theresia Gouw Ranzetta] said.

Instead, investors are looking … Read more

Wikimedia Foundation raises $6.2 million for Wikipedia

The Wikimedia Foundation announced Friday that it has reached its goal of raising over $6 million to sustain Wikipedia.

With the help of over 125,000 donors from around the world, the Wikimedia Foundation raised a total of $6.2 million, sustaining Wikipedia for the foreseeable future. The money will be used to maintain and grow the foundation's technical infrastructure.

"This campaign has proven that Wikipedia matters to its users, and that our users strongly support our mission: to bring free knowledge to the planet, free of charge and free of advertising," Jimmy Wales, the founder of … Read more

Scribd chalks up another $9 million

Document-sharing service Scribd has pulled in $9 million in a Series B funding round, the company announced Friday. The round was led by Charles River Ventures with participation from existing investors Redpoint Ventures and Kinsey Hills Group.

With the new cash, Scribd plans to speed up its product development and hire new employees.

And the first of those hires was announced in conjunction with the funding announcement: George Consagra, who most recently served as chief operating officer of AOL's Bebo, has been hired as president. (Co-founder Trip Adler has the CEO post.)

Scribd's monthly user count is now … Read more