Dan Primack

I’m pleased to announce that peHUB is (finally) hosting an event with some meaningful content. It’s called The Limited Partner Congress, and will take place on June 9 at Bond Street (one of New York's top restaurants). This will not be a typical industry “conference,” with vanilla outlook panels and warmed-over sirloin. Instead, it’s a series of off-the-record working groups and networking sessions, in which limited partners can discuss the myriad of challenging issues they currently face. The format was inspired by a World Economic Forum event I participated in last year, and is intended to help LPs foster both solutions and a better sense of community. A big caveat is that The LP Congress is an invite-only affair. I sent out an initial batch of invites yesterday via email, and will be sending out more today (each one is personalized, so it takes some time). If you have not received an invite but are interested in attending, please send me an email with your name, job title and place of work. I’m sure there are many worthy LPs who were unintentionally left off the initial list, and we obviously would like to see you there.

Kleiner Perkins is on the verge of having a massive crater in its energy portfolio, but it has nothing to do with cleantech. Instead, the trouble involves Terralliance, a stealthy oil and gas exploration company that quietly raised $295 million in equity funding from KP and others. peHUB has learned that Terralliance has fired its founding CEO, laid off around 80% of its workers, closed offices and is desperately trying to renegotiate a massive debt-load. If it can't get the last piece done, then Terralliance might itself become a fossil fuel. "It's all about restructuring the debt, but the lender doesn't seem too eager to bail out the equity guys," says a source familiar with the situation. "[The lender's] feeling is, hey, the product works." That product is software that Terralliance says makes it easier and cheaper to locate oil and gas. The company then uses the software to do its own exploration, rather than simply selling it to third parties. Here is how Terralliance explained it, in a draft private placement memorandum dated April 2007:

peHUB has learned that Capital Dynamics of Switzerland has signed an agreement to buy HRJ Capital, a Silicon Valley fund-of-funds manager that last year defaulted on a warehouse loan from Silicon Valley Bank. Financial terms are being held close to the vest, although sources say that the transaction will include a partial repayment of the $68.9 million debt. A final close is not expected to occur for at least a month, because HRJ needs to get limited partner approval for the change of management company. This deal would cap off a traumatic year for HRJ, a firm formed in 1999 by ex-NFL stars Harris Barton and Ronnie Lott.

As we suspected, TheFunded was playing a prank when it intimated last Friday that it wasn't long for the Web. Basically a premature April Fool's Day joke/PR stunt, although a few too many bloggers were willing to believe that some sort of serious legal threat was at hand (if there were such a suit, wouldn't the site have shut down immediately, rather than giving five-day's notice?). Anyway, check out the site's new message after the jump:

Early Saturday morning, Ross Levinsohn confirmed reports that Jon Miller -- his investment partner for the past several years and former CEO of America Online -- is heading back to the operating world, as News Corp.'s new head of digital media. The deal isn't official yet, but is expected to close once Miller's non-compete with Time Warner expires this Tuesday at midnight. Most of the related coverage has focused on what Miller's move could mean for News Corp., but I'm more interested in the ramifications for Velocity Interactive Group -- a VC firm that Miller and Levinsohn helped form in late 2007, alongside the dysfunctional remains of ComVentures. My gut reaction is that it may prove fatal, particularly given Velocity's difficulty raising new money even with Miller. On the other hand, it's also possible that Miller's presence was a double-edged sword for certain LPs, given his well-known (and now indisputable) wanderlust. Not that his departure is a net positive, but perhaps it's more a flesh wound than a death blow.

Just got back from New York, to find nearly a dozen emails asking if I'd heard about TheFunded shutting down. The hubub is related to the following message that appears as a splash screen on the site's homepage:

Sequoia Capital is "pushing ahead" with its its outsourced investment management platform for college endowments (a.k.a. Heritage Fund), despite the apparent departure of team leader Eric Upin. That's the word from Dan Feder, who joined Sequoia last year after having run venture capital and private equity for the Princeton Investment Management Co. I reached Dan on his Sequoia line earlier this morning, probably because the receptionist wasn't in yet to screen me out. He declined to get into specifics (per Sequoia's MO), but did say that he had no plans to leave the Silicon Valley-based firm.

A few years back, I created a Word document called "The Walking Dead." These were venture capital firms that were officially in business -- lights on, working websites, cash to support existing investments -- but which no longer had enough cash to add new portfolio companies. Then I made the mistake of mentioning this document to peHUB Wire readers, who began regularly asking me to publish it. This posed some big journalistic dilemmas, because the list was mostly based on hearsay and intuition. Great for my desktop -- bad for the Web. Last week, however, I began the process of verifying the zombie-hood of the aforementioned firms. What I came up with were 14 shops that could legitimately be dumped into the Walking Dead bucket. That only represents around one-third of the firms on my personal list, but it's better to be safe than sorry when it comes to things like this. If you've got an additional firm to nominate -- and can provide some specific details -- my inbox is always open and confidential. And yes, I do expect this to just be Part I of an ongoing series. So, without further ado, here you go...

Gili Raanan, founder of such companies a nLayers Inc. and Sanctum Inc., has joined Sequoia Capital as a general partner, peHUB has learned. He will work out of the firm's Israel office, which lost partner Yuval Baharav last month. Sequoia recently raised $200 million for its fourth Israel-based fund. Raanan's relationship with Sequoia goes back at least a decade. The venture firm was an initial investor in Sanctum, an e-business security software company that raised $55 million before being acquired by VC-backed Watchfire (itself later bought by IBM). He then went on to found nLayers, which application discovery and mapping software. nLayers got scooped up by EMC in mid-2006, after which Raanan spent a few months as EMC's vice president of strategy.

Chris Hughes has more professional accomplishments at 26 year-old than most of us will have in a lifetime. He co-founded Facebook with college roomates Mark Zuckerburg and Dustin Moskovitz, before leaving in 2007 to help the fledgling Obama campaign launch an online media strategy. The result was My.BarackObama.com, which many credit with getting the Illinois Senator elected. Now Hughes has a new fulltime gig: Entrepreneur-in-residence with venture capital firm General Catalyst Partners. “Chris has a unique connection to what it takes to build and start entrepreneurial companies, especially those driven by the energy of young people,” says Neil Sequeira, a partner with General Catalyst. “What we really want him to do is to be out there in the community helping young entrepreneurs and encouraging them with infrastructure and guidance.”