VC Roundup: Quaker gets aroused, Safeguard swaps debt

Welcome to the VC Round-up, where we’ll parse through venture capital news related to Philadelphia-based private equity firms and the companies they fund. Subscribe to the roundup as an email newsletter. If you have any VC-related news to pass along to us, please drop us a line.

DEFINITE READS

As we tweeted yesterday, Fast Company interviewed Josh Kopelman about why people should start a company in Philly. In the interview Kopelman points to local universities and the low cost of living as prime reasons people should set up shop here. The article came after the local community lobbied the magazine to be included in its series.

According to a press release, Quaker BioVentures has teamed up with a student-run VC firm to invest in Semprae Laboratories. The company makes “arousal” oils. Yes, we’re serious.

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Philly goes to TED … kinda.

In case you have sworn off Twitter and the national tech media, the esteemed TED conference took place in Long Beach, California last week. The event features 18-minute speeches from former presidents, CEOs, academics and other hand-selected thought-leaders. The attendees are also cherry picked requiring an invitation and a $6,000 ticket.

Normally, the guest list of the yearly conference remains secret, however the fellas over at Valleywag have gotten their hands on the entire guest list. After some extensive searching and find a replace magic, we found everyone from Philly who was deemed worthy enough to attend the event.

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Startup Leaders hosts second annual Founder Factory to mixed reaction

Founder Factory audience members were given a chance to offer advice, along with panelists, to startups like language-learning tool PlaySay.

More than 250 gathered throughout the day for the second annual Founder Factory, a sold-out gathering of entrepreneurs, investors and students organized by Philly Startup Leaders at World Cafe Live in University City Thursday.

The event was a chance for business-minded folks to gather, discuss, dissect and learn about the work they are doing throughout the spheres of startups, education and investing.

Presenters from Ben Franklin Technology Partners, Wharton Business School, Internet Capital Group, myYearbook and Monetate were rotated with fishbowl sessions— where young startups pitch their idea to experienced business people for advice—each ushered onto the stage to red and blue stage lighting and dramatic rock and jazz music.

During the afternoon, 150 attendees listened to entrepreneurial conversations while seated at long dining tables in front of the stage, standing at the bar, or gazing down from the mezzanine level, while a handful mingled in a nondescript lobby.
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Event Highlights for November 2 – November 8, 2009

Updated @ 11/2/09 12:20 p.m.: A private event was incorrectly listed here. It has been removed.

Philadelphia Business Journal’s Peter Key nailed it on the head last Thursday when he compared Philadelphia and New York’s tech scenes.

“[Philadelphia] is really a tight-knit group of people [who] are having regular meet-ups,” an outside observer told the veteran tech reporter.

True again this week, as we see the regulars, like PhillyCHI and Philadelphia Linux Users Group, doing their monthly thing. Refresh Philly is still at it, as is First Round Capital, which you’ll see in our highlights after the jump.

As you may have noticed, we here at Technically Philly are trying to get involved too, doing what we can to work with local organizations to help spotlight the future of media. That’s why we’ve partnered with Temple University and others this week for PhIJI, the Philadelphia Initiative for Journalistic Innovation. Excuse us for the shameless self-promotion for an event that’s not free (but is affordable). Truly, we want you to be involved. There’s no better time to help shape the future of media in Philly and beyond, and we can think of no one better to help than our technology community.

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Shop Talk: Notehall, an ABC spot behind them and 65-college growth ahead

Notehall Chief Marketing Officer DJ Stephan and CEO Sean Conway on ABC's "Shark Tank" last night

The dining room is gone in this Manayunk rowhouse.

The living room, too, will soon be taken over by what will serve as desks and workstations for an expanding Web 2.0 startup that relocated from Arizona to the neighborhood in northwest Philadelphia that has attracted a steady stream of 20-something professionals for a decade or more now.

Sean Conway

“This is home,” says Sean Conway, the 25-year-old co-founder and CEO of Notehall, an online marketplace for study exams, class notes and other supplemental academic material that is already at 15 colleges nationwide and is due to expand to as many as 65 more by the end of the academic year — 20 to 25 this semester and 30 to 40 in the spring.

Students upload their own documents and take a 40 percent commission when sold to their peers, who are allowed to peek at a third of the document before purchase.

Notehall now has seven employees, including five in Manayunk and two executive staff in Arizona, and is looking for more — including a PHP developer — most of whom are being financed by their own revenue, though some investment capital remains. Last month, they debuted their Penn State marketplace and, they’re already generating positive revenue there, “it’s just soaring,” Conway says, though he declined to disclose just how high.

But now they go to work, fighting to get attention among the growing crowd of Web-based startups calling for college-aged attention. They’ve had a good start.

Last night, Conway and his chief marketing officer DJ Stephan appeared on ABC’s Shark Tank, which puts entrepreneurs in front of five investors on national, prime time TV to field offers. In fitting reality TV, there was drama, but Notehall came away with another investor.

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Would First Round Capital move to New York City?

West Conshohocken and San Fransisco-based First Round Capital has announced it will be opening a new office in the 67th Ward.

Managing Director Josh Kopelman has made no secret about the firm’s affinity for the Big Apple, citing the success of First Round’s “Office Hours” events held in the city’s Silicon Alley. First Round has funded more than 10 NYC startups, launched a NYC mentoring program and are often seen attending meetups throughout the city.

So, does this new office mean the West Conshohocken office’s days are numbered?

“No, not at all,” said Kopelman, “the West Conshohocken office has more partners than any of the other offices.”

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Josh Kopelman called ‘richest man in town,’ among most networked venture capitalist

Josh Kopelman is apparently not entirely comfortable with being a big shot.

The entrepreneur turned venture capitalist, who made his name on the back of the $355 million sale of his creation Half.com to eBay in 2000, has been a bit of a big fish in an underdeveloped Philadelphia pond for some time now. But he doesn’t always take adulation so warmly.

Kopelman was reportedly put off by the label of the wealthiest self-made person in Philadelphia, author W. Randall Jones told the Inquirer. For his new book, the Richest Man in Town, Jones traveled to 100 U.S. cities to collect business wisdom from those atop the income brackets in their towns and found Kopelman to be our pick of the litter.

“He was very upset with me,” Jones told the Inqy.

While Kopelman may have disliked the thought of being placed above a host of the city’s billionaire’s boys club, it’s not the only big call he’s gotten this week.

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Shop Talk: Philadelphia’s venture capital community on Twitter

Image courtesy of millionclues.com

If you have ever shown a friend or relative Twitter, you were probably met with a response along the lines of, “Why would I ever want to use this?”

Mostly, it’s hard to quantify the usefulness of a tool such as Twitter, but the startup and venture capital research Web site Chubbybrain has given it their best shot by asking the question: Do VCs who use Twitter invest in more startups?

The report is an interesting look at how venture capital firms use Twitter while judging its effectiveness. But, as expected, the report focuses mostly on VCs in California, Boston and New York. That got us thinking, what local VC’s are on Twitter?
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Business Week profiles First Round Capital

Remember that time we assessed Philadelphia’s venture capital market and told you local early stage investors were doing well?

Well, BusinessWeek magazine surmised just as much in a well-produced profile of local venture capital firm First Round Capitol. According the the profile, First Round, located in San Francisco and West Conshohocken, has continued to invest in startups as other VC firms lay low in this recession. Because of the general pullback in investing, First Round has found itself the most active seed-stage investor. The firm has even received investments from the endowments of Yale and Princeton.

The profile details the new math behind venture capital, which is shifting from IPO and big buy-out strategies to small investments as technology costs fall. Writer Spencer E. Ante gives Philadelphia a serious nod by using Wharton grad and First Round Managing Partner Josh Kopelman as the story’s primary source.

Even if you have only a passing interest in startups and investing, the profile is worth a read over lunch for an inside look at one of the region’s heavy hitters.

Symantec purchases company in First Round portfolio

Symantec Corp, maker of Norton anti-virus software, has acquired Mi5 Networks, provider of super-fast Web security products.

While Mi5 is based on that other, less awesome coast, their largest financier, First Round Capital, has offices in West Conshohocken. In a phone interview, Lead Partner Josh Kopelman confirmed the deal but said the details of the transaction are remaining private at this time. CNET is reporting that it was an all-cash exchange.

Symantec will integrate the company’s technology that protects users from Web-based threats into its existing software platform by later this year.