MOOC Player Coursera Hires Netflix, Facebook Execs

MOOCs, a/k/a Massive Open Online Course, have touted their ability to "disrupt" traditional academic education by changing "delivery models." These Internet-based schemes offer open courses, worldwide participation, and replay capability. Much as in traditional higher education programs, the Q&A sessions are left to poorly paid teaching assistants. What they don't offer is a walk-in classroom and a live human being delivering "knowledge."

Coursera, started by two Stanford University computer science professors, is in the vanguard of the MOOC movement. Their desire to reshape the higher education landscape recently took an interesting turn. Earlier this month, Silicon Valley Business Journal (SVBJ) reported that Coursera hired two Valley executives. One was poached from Netflix; the other was swept away from Facebook. What do these two men (yes, they are men) have in common? Well, neither are educators. The Netflix wiz understands algorithms that use predictive models to suggest "choices" for end-users. In Coursera's case, that would mean students. The Facebook "engineer" has a background in making video and other groovy "necessities" function in a social network environment.

The SBVJ story noted that Coursera was in Series B venture funding. In other words, it had a long way to go before the VC crowd could cash in on the bull rush to MOOC Ed. However, it also noted that Facebook's Mark Zuckerberg just invested in an "education analytics" firm called Panorama Education. There was no word on whether Panorama Ed received any interest from the Newark, New Jersey school system, which Zuckerberg so publicly donated stock around the time of the opening of the unflattering movie The Social Network.

Venture Capital's Sharp Funding Drop Raises Start-Up Eyebrows

Peter Delevett
(photo: Twitter.com)

Technological innovation's lifeblood includes funding. Typically, a significant source of that revenue comes from venture capital sources. The funding tends to come from institutional firms or VC firms who work with wealthy individual investors. These groups' financial commitments offer a very useful window into the "smart money's" perceived perspective on high tech's growth prospects.

According to a story by the excellent Mercury News reporter Peter Delevett, the view from VC is not rosy at all. Venture capital firms, he noted, invested twelve percent less than in the prior quarter. "That's a troubling sign," Delevett wrote, "considering that 2012 was the first time since the Great Recession that venture capital investment fell year over year."

In the absence of appealing venture capital opportunities, where will this "smart money" go? Inquiring minds would like to know.

Silicon Valley Bank To Open London Branch

In the world of technology startups, Silicon Valley Bank is a big deal. The institution claims to work with more than half of all venture-backed technology and life-science firms in the United States. The bank is a player in emerging nations, such as China, and tech-savvy oases such as Israel. SVB is now moving into new ground, with the announcement of its intention to open a London branch. Not only will this give Silicon Valley Bank entree to UK startups, but it's also viewed as a bridgehead into Continental Europe.

The story was reported in today's siliconvalley.com.

Is There A Venture Capital Case To Be Made For "Old Entrepreneurs"?

Vinod Khosla (photo originally appeared in The Washington Post)

Washington Post columnist Vivek Wadhwa recently raised an often whispered question about age and entrepreneurship. Using remarks by venture capitalist Vinod Khosla as a launching point, Wadhwa states the issue plainly: is there an age threshold for individuals who, in Khosla's words, "make change happen"?

This thorny proposition is usefully explored in Wadhwa's column. The piece includes links to an interesting session conducted by Garage Technology Ventures in which Google's Eric Schmidt and Sequoia Capital's Michael Moritz address the topic. The prevailing sentiment, at least from Silicon Valley and other tech bastions, is that age matters in certain circumstances. According to this line of reasoning, the most "disruptive" ideas, inventions, and innovations in technology come from twenty-something wolves. However, in areas where experience adds exponential value to a firm's direction and performance, the age  ceiling moves up into an essentially less defined zone.

In fairness, Moritz hedged his bets by mentioning there were some older folks, such as Yahoo's Terry Semel, who "has the metabolism of somebody in his 20s. You can have some old 20-somethings and some young 60-year-olds, but the passion is the enduring things."

Now, I have some skin in this game, as my age puts me in the older-than-25 group. I'm old enough to be wary of buzzword use, including current vocabulary flavors such as "disruptive" and "passion." Still, the whispered question about age is there, and clearly present in the VC and entrepreneur communities.

You're welcome to comment on this topic. It's one that will not go quietly into the night.

Chinese Government Grants Operating License to Silicon Valley Bank

With trumpets blaring, today's tech news focused on gossip about the late Steve Jobs, Netflix's jump off the equity value cliff, and who's zoomin' who at Yahoo, slipping quietly through the noise was by far the day's most important Silicon Valley story: the Chinese government granted Silicon Valley Bank a license to operate in the PRC.

This is a big deal. As reported in today's siliconvalley.com (the tech pages of the San Jose Mercury News), Silicon Valley Bank is the first foreign bank to be granted a license to operate inside China in nearly 15 years. Business in the country known as the Middle Kingdom is challenging enough with local connections, and virtually impossible without them. The official seal of approval probably means the bank will be a significant player in startup funding for Chinese tech firms. It also suggests the bank could serve as a useful bridge for backdoor communications between Chinese and US officials in this area of national security.

The bank is part of the SVB Financial Group, which is listed on NASDAQ with the call letters SVBI. Interestingly, according to records in Yahoo Finance, insiders have done some significant selling in the past few months. However, don't worry too much: the bank's major shareholders include some of finance's heaviest mutual fund hitters. They're not leaving SVBI anytime soon.

Silicon Valley's TriplePoint Capital Raises $1 Billion For Venture Debt Fund

TriplePoint Capital CEO Jim Labe

Bambi Francisco Roizen reported in vator.tv that TriplePoint Capital and its CEO Jim Labe have raised one billion dollars to invest in a venture debt fund. The money comes mainly from private and institutional investors, and is seen as a sign of a slowdown in VC fund raising. For startups and second-tier firms, those are very unwelcome storm clouds, and implies a sense of financial caution in the world of so-called "smart money."

Maybe that is so. However, venture debt is far from a form of investor's despair. From an investment perspective, there are some advantages to debt over equity. Some investors prefer debt issues, as they provide an income stream. Significantly, the debt is not simply a vanilla bond-style investment; some debt holders obtain warrants as well. The warrants can dramatically add to the value of the investors' stakes.

Part of the game here is the opportunity for investors to get into what Roizen's article characterized as "top-tier" investment opportunities. That's something of an insider's game, with the belief that there's gold at the end of the VC investment rainbow.

There's gold at the beginning and middle, too.

Venture Capital Funding of Bay Area Firms/Second Quarter 2011

Here's a quickie Sunday FYI. Chart about VC funding via the San Jose Mercury News. If you're interested in VC, the landscape of tech innovation, and the horizon where ideas and practical (well, sort of) applications intersect, you'll want to explore this information. I admit it's not for everyone.

A Mercury News article on the same subject, by Peter Delevett, fleshes out the charmless Excel-style chart and adds details about affected industries and national trends.

Search for Women-Run Venture Capital Firms In the US Nets A Grand Total of One

Venture capital is a realm where typically those with big ideas in technology roam. In many ways, VC is America's leading incubator for putting remarkable ideas into practice. When they hit big, VC investors make a fortune. However, at its highest reaches, venture capital is a man's world, something the with-it tech crowd doesn't really like to publicize. (The movie The Social Network hints at tech's rampant, aggressive sexism.) For every Meg Whitman, there are hundreds of "cool" guys blessed with ideas, ego, and drive (both professional and sexual).

Therefore, I was intrigued when a story in today's San Jose Mercury News focused on what is most likely the only female-run VC firm in the Land of the Free and the Home of the Brave. The article, by the interesting journalist Peter Delevett, interviewed the firm's two managing partners. Their business acumen convinced them to invest in Pandora, which turned out to be a winner. The two women -- Cynthia Ringo (photo) and Nancy Pfund -- also believe in taking environmental and social issues into account in their business decisions.

Vator.tv includes a thumbnail biography of Ringo. The website was founded by Bambi Francisco Roizen, a Silicon Valley journalist who knows just about everyone involved in the area's tech and VC communities. She still runs Vator and retains a strong interest in emerging enterprises.

It's refreshing and important that women such as Roizen, Ringo, and Pfund (sounds like a law firm) are marking their territory in tech's boy's club. However, they only have a toehold in the merciless commercial and entrepreneurial jungle known as Silicon Valley. More women are needed in impact positions in VC and innovation. Men don't have a monopoly on brains; in fact, they let the wrong head do their thinking. It's time for greater gender balance, for everyone's benefit.