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DFJ Restructures Firm Partner Network
Back in 1990, then relatively young venture firm Draper Fisher Jurvetson started thinking about how to expand the firm’s presence outside of Silicon Valley and share ideas and diligence with other VCs in the industry. DFJ created a partner network of independent VC firms across the globe that adopted DFJ branding. It was the closest thing to VC franchising at the time.
The first firm who joined was DFJ Polaris, who was based in Alaska. This network was an early version of the agency model that many VCs have adopted in the past few years as the affiliate VCs and DFJ combined created an extended network of resources (both in the U.S. and globally) for portfolio startups. Now DFJ is announcing that the firm is restructuring the network to clarify branding and create a governing board around the body.
To date, there have been 16 outside funds who have joined the network, 11 of which are outside the U.S. These include DFJ Mercury, DFJ Athena Korea, DFJ Frontier, DFJ Esprit, among others. As mentioned above, these firms are independent when it came to fundraising, LPs, and decision-making on when to fund startups. In turn for the branding and access, DFJ would have some carry in the funds that joined DFJ’s network (and there was also income paid to DFJ in the form of dues).
As part of the restructuring, DFJ will be creating a governing board, who will oversee the entire network, which includes DFJ’s own funds, DFJ, and DFJ Growth. The board is composed of a DFJ partner and includes representation from other network partners. Along with the board, the partner networks will be dropping the DFJ-branding from their names. For example, DFJ Mercury is now Mercury Fund.
So why the change? As the firm explains, the partner funds have matured, and are self-sustaining, meaning the DFJ branding is no longer necessary for these funds to create deal flow and more. DFJ Partner Don Wood, who also holds a seat on the governing board of the DFJ network, says the “restructuring wasn’t necessary per say, but instead it was an evolution and improvement of network.” He adds, “The benefits of the network remains the same, it’s just that the governance of the network has changed and actually gives a strong and equal voice to all the members of the DFJ family.”
In terms of the branding decision, Wood explains that the DFJ name attached to these independent funds caused confusion, especially amongst LPs and entrepreneurs.
As for the board, the benefit is two-fold, he says. First, it clarifies any confusion on how the network works. And second, it makes the network more of a democracy. For example, if a new firm wanted to join the network, the board will make the decision. This was previously made by DFJ in the past.
The board itself will help coordinate benefits, such as discounts to office services, to all startups in the network’s portfolio. Another interesting change–DFJ itself will no longer have any direct economic benefit to firms joining the network. Member firms still pay their dues (though now to the board), and DFJ will not get any carry in network firms. Dues from the partner networks will go towards creating services and making hires that can manage the relationships and networks between firms.
The question many may ask how the network firms have responded to this change. According to DFJ, they have embraced these changes and also found the existing structure to be confusing to both LPs and startups.
DFJ JAIC, which is going to be known as Draper Nexus, launches a cross border VC firm with around $50 million to invest in Japanese and US startups. The firm joined the network in 2011, and saw DFJ as an opportunity to give startups a global network of access points. “Our four person fund has limited brainpower and we wanted to tap into a larger knowledge base, and take a more global view to managing and helping our startups,” says Quaaed Motiwala, Managing Director of the firm.
Wood says that since the decision was made (which was unilateral across the network), no firm has dropped out of the DFJ partner program. In fact, many of the partners from DFJ network firms decided on the new infrastructure themselves.
DFJ, who last closed its tenth, $327 million fund back in 2010, says that this was the natural evolution of the partner program. You also have to wonder if the firm is raising a new fund, and decided to take some of this feedback from LPs into account. It should also be interesting to see whether any other VC firms follow suit in creating a similar structure.
A Year After Launch (And With 300K Sites Created), ‘Social Front Page' RebelMouse Mulls Ad Strategy
It’s been a little more than a year since former Huffington Post CTO Paul Berry first launched RebelMouse, a service allowing users to pull their content together from across social networks. To mark the occasion, Berry stopped by the TechCrunch office to look back at the past year and hint at his plans for the future.
Overall, Berry said that the service’s growth has backed up his initial vision.
“We haven’t done any pivots — we’ve just been following the core path,” he said. “A year ago, I had all these hypotheticals of how people could use the product. Now there’s an insane amount of anecdotal evidence.”
As shared in a company post, RebelMouse is now reaching 5 million unique monthly visitors, and its users have created 300,000 sites. Publishers like the Wall Street Journal, TechCrunch- and Huffington Post-owner AOL, and Time have used the technology, as have brands like GE, Patagonia, and Sprout Organic Foods.
One thing you might notice about all of those links is that they don’t go to RebelMouse site itself, but instead to the websites of the publishers in question. Berry said that’s as it should be: “We want to be very clear to everyone that it’s not as important to us to be the destination as it is to help the open web.” That goes back to the original vision, where Berry realized that it’s “too hard” for many people to build and update a website using a traditional content management systems. With RebelMouse, you can take advantage of all the content that you’re already posting on other sites to create a unified, up-to-date presence, whether the “you” in question is a person or a company.
And if you want to pay RebelMouse for the privilege, even better. The company is already making money through a subscription program where users pay $9.99 a month to host their RebelMouse site at their own domain. The next step in Berry’s monetization plan is advertising, specifically the term that everyone is embracing nowadays, native ads.
Berry acknowledged that native “is a highly abused term” (in his view, native advertising means that the ad has to match the look and the content of the site), but he argued that RebelMouse can deliver sponsored content in a real-time way that’s sensitive to the user’s context: “We can give publishers native advertising at scale.”
Other future plans include the launch of smartphone apps (although Berry noted that mobile already accounts for a significant part of RebelMouse’s traffic.)
And of course, as RebelMouse evolves, so does the social media context in which it’s operating. The past year has seen the new social apps explode in popularity, and Berry predicted that the process will continue.
“It’s surprising, but social graphs, instead of gaining value over time, well, there’s an aspect that’s true, but there’s the opposite, where they lose value over time — people enjoy new networks,” he said. “That’s why RebelMouse’s goal is to remain the Switzerland of all of this.”
Nokia Launches Nimbuzz Chat App To Tell Indian Users To Trade Up To A Smartphone
After biding it’s time in emerging markets, free messaging app Nimbuzz has ben ratcheting up the news and partnerships lately. It’s hit 150m users globally, is strong in Asia, India and Saudi Arabia, has been adding new apps for platforms like Windows 8, and signing telco deals.
Of course, Viber, WhatsApp and GroupMe are doing well, but these startups concentrate on smartphone apps. Nimbuzz emerged on feature phones and still has a story feature phone user base. But Nimbuzz is unique in that is has opened up its platform for third party messaging services which behave like little chat bot apps.
These bots are called Chat Buddies. There are Weather bot apps, or you can chat with a horoscope app that behaves rather like a text-based Siri. Independent developers have added ‘chat games’ like Hangman or an app called “Stranger Buddy” which is like Chat Roulette in text form. Brands are gradually realising this is a very clever way to interact with users, especially in emerging markets. These chat apps are hugely popular in regions where text messaging works and where data is expensive.
Now Nokia has developed its own Chat Buddy called Nokia Lucky Sunday. From tomorrow this will appear as a contact on the roster of all Nimbuzz users in India and start to quiz users and reward them with prizes. That’s over 25 million users, or a quarter of the entire mobile Internet population of the country.
With every correct answer, the user moves a leaderboard and the top users stand a chance to win Nokia smartphones at the end of every Sunday. Vikas Saxena, CEO, Nimbuzz, says the move “is a translation of the belief that brands have in our platform.”
This is obviously going to remind feature phone users who may still be on Nokia to opt for a Nokia smartphone when they change handsets. But because Nimbuzz works across all smartphones, it means Nokia can try and entice them back via the Chat Buddy.
Nimbuzz is available on all major platforms such as BlackBerry 10, Android, iOS, Symbian, Windows Phone, and J2ME, as well as Windows and Mac computers. It’s pre-loaded onto all local OEM handsets in India apart from Nokia, Samsung, LG.
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