Random Ramblings: HuffPo and More

The self-obsessed blogosphere is sure to be buzzing today with news that Technorati has scored $7.6 million in Series C funding, from return backers like DFJ and Mobius Venture Capital (according to a regulatory filing). But Technorati is basically just a search engine, rather than an original content provider. So imagine the hubbub when HuffingtonPost.com finishes up its first institutional round of VC funding later this summer. 

“Validation, oh sweet validation!” the bloggers will shout from their basements, while most VCs try to understand how HuffPo’s non-contextual button ad-revenue model will ever produce venture-type returns. I would have asked HuffPo co-founder Ken Lerer that very question, but he gave me a reflexive “No comment,” before I could finish uttering “I’m calling about the venture capital round…” Expect the initial raise to be $5 million, with more to come. 

*** Steve Syre has a good Boston Globe column today on Thomas H. Lee Partners’ $6.1 billion fifth fund, which closed in 2000. Specifically, he details how the fund is producing decent returns for limited partners, despite the Refco disaster and middling performing of American Media (you know, the deal that resulted in Harvard owning a piece of The National Enquirer). 

While THLP continues to put the finishing touches on a new $9 billion fund, estranged namesake Tom Lee continues to build out his new shop down in New York. The latest hire is Mark Gormley, a founding partner of Capital Z. No strategy specifics are yet available for Lee’s endeavor, but initial speculation of a small-cap private equity focus has gone by the wayside. It’s also worth noting that the shop actually has done a few deals, albeit with minority positions that have allowed it to continue flying beneath the radar. 

*** The latest issue of Buyouts Magazine reports that U.S.-based buyout firms disbursed around 39% more during the first half of 2006 (approx. $110 billion in disclosed value) than over the first half of 2005. And this doesn’t even count pending mega-deals like Kinder Morgan. As for fund-raising, the data shows around $93 billion raised for LBO funds, mezzanine funds and related funds-of-funds during the first half of 2006. This is compared to just $79 billion over first-half 2005 totals (which itself was a record). 

*** Finally, a quick quiz. Can you name the Silicon Valley-based GP of a bi-coastal venture firm who recently — and quietly — resigned/retired? Hint: The firm’s original healthcare partner has transitioned into an emeritus role.