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Year in Review: Sexual-harassment charges, ICOs dominated 2017

The top recurring headlines that dominated much of 2017 were those regarding the sexual-harassment accusations levied against several VCs.

The story line is one the VC community will no doubt revisit in the months and years ahead. The ramifications include a rethinking of LP-GP agreements, fund formations, potential lawsuits and a loss of entrepreneur confidence.

But it wasn’t the only event to make news in 2017.

The year’s VC-related events included the usual array of exits, startups gone bust and significant funds raised.

The year also saw the amount of ICOs rise significantly, as VCs and the SEC paid increasingly more attention to the volume of capital being raised via cryptocurrencies. In September, the SEC’s cyber unit was created to focus on enforcement relating to “misconduct involving distributed ledger technology and initial coin offerings.” And by December, it filed its first charges against a company committing fraud.

Below is a timeline of some of the most significant happenings in the venture community during 2017.

January

Cisco Systems says it will buy AppDynamics for $3.7 billion, the largest VC-backed acquisition of the year. The application-performance-monitoring provider had planned to go public with an offering that would have valued the company at no more than $1.7 billion.

Arjun Arora, 500 Startups, venture capital
Arjun Arora, partner, 500 Startups. Photo courtesy of the firm.

500 Startups names Arjun Arora to handle investor relations and head up fundraising. 500 Startups, which launched in 2010, is aiming to raise $150 million for its fourth main fund.

Gil Penchina, founder of Flight Ventures, the largest syndicate on the AngelList platform, joins IDG Ventures as a partner.

February

Sequoia Capital shuffles its leadership, with Partner Jim Goetz handing his management responsibilities to colleagues Roelof Botha and Alfred Lin. Botha and Lin will work under Doug Leone, who oversees global operations alongside Neil Shen.

VC partner people
Renata Quintini, partner, Lux Capital. Photo courtesy of the firm.

Renata Quintini switches firms and becomes a partner at Lux Capital, which raised $400 million for its fifth venture fund to invest in robotics, drones, driverless cars, 3D tech, VR, AR and related scientific technologies. Quintini previously was a general partner with Felicis Ventures, which she joined in late 2011 and where she invested in Dollar Shave Club, Bonobos and MetroMile, among others.

Beepi, the Mountain View, California, used-car marketplace founded in 2013, closes shop after raising $149 million from Foundation Capital, Redpoint Ventures, SVB Capital and Sherpa Ventures.

Quixey, which billed itself as “the search engine for apps,” shuts down after raising $165 million, including $30 million in debt financing, mostly from Alibaba. Other investors included Atlantic Bridge, GGV Capital and U.S. Venture Partners.

March

Snap, the owner of the Snapchat app, which is popular for its disappearing messages, raises $3.4 billion in its IPO, more than the $3 billion that Facebook offered to pay for the company in 2013. It ranks as the largest VC-backed IPO of the year. Among the company’s venture backers were SV Angel, Benchmark, General Catalyst Partners, IVP, Lightspeed Venture Partners and Kleiner Perkins Caufield & Byers.

Snapchat IPO NYSE
A Snapchat sign hangs on the facade of the New York Stock Exchange in New York, on Jan. 24, 2017. REUTERS/Brendan McDermid

Lightspeed Venture Partners, Hummer Winblad Venture Partners and New Enterprise Associates receive big windfalls from the MuleSoft IPO. The three firms collectively own 42.1 percent of the company, which went public on March 17 and was the second high-profile offering from a unicorn this year, following on the heels of Snap.

Kevin Rose says he’ll join True Ventures as a venture partner. Rose, a co-founder of Digg and a former venture partner at GV, previously known as Google Ventures, will resettle in San Francisco from New York.

Chris Sacca, whose bets on Twitter and Uber brought him wide attention in venture circles, says he is giving up investing and his role on ABC’s “Shark Tank.” Sacca says he is “hanging up his spurs” because he had achieved what he set out to when he started Lowercase Capital a decade ago. He says Lowercase and his partner, Matt Mazzeo, would continue to support the firm’s portfolio companies.

April

Blockchain Capital, a San Francisco venture firm focused on blockchain technology and cryptocurrency startups, raises a portion of its third $50 million fund by selling its own digital tokens, the first VC firm to do so. The firm raised $10 million online in less than a day by offering investors digital tokens called BCAP.

Eniac Fund Fundraising VC
General partners of Eniac Ventures (left to right) Tim Young, Vic Singh, Nihal Mehta and Hadley Harris. Photo courtesy of the firm.

Eniac Ventures raises $100 million for its fourth and largest fund, upping its size by more than 80 percent over its preceding fund. The seed-stage investor later hires more staff as it introduces a support-service platform for its portfolio companies.

Yik Yak, the Atlanta anonymous-messaging gossip app, says it’ll shut down after raising more than $71 million in funding from DCM Ventures, Sequoia Capital and Azure Capital Partners.

May

Softbank unveils Vision Fund, targeted at $100 billion. The Japanese telecom giant announces its first close at $93 billion, with commitments from Apple, Qualcomm, Mubadala Investment and Foxconn, among other high-profile backers. SoftBank, and its forward-thinking Chief Executive Masayoshi Son, bills itself as potentially the world’s biggest technology investor over the next decade.

Benchmark announces Sarah Tavel has joined the firm as its first female general partner. Tavel joins the firm from Greylock Partners, where she was a partner. Before that, she was a product manager at Pinterest and spent six years at Bessemer Venture Partners. Benchmark now has six partners.

People NVCA
Scott Kupor, managing partner of Andreessen Horowitz and chair of the NVCA. Photo courtesy of Andreessen Horowitz.

Scott Kupor is named chair of the National Venture Capital Association board for the 2017-18 period. Kupor, a managing partner at Andreessen Horowitz, succeeds Venky Ganesan, a managing director at Menlo Ventures. The NVCA also named Alexis Borisy, partner at Third Rock Ventures, as chair-elect for 2018-19.

Obvious Ventures, co-founded and backed by Ev Williams of Twitter fame, closes its second fund with a palindrome total, $191,919,191, a single nine-digit number with 1s and 9s. Co-founder and Managing Partner James Joaquin says the palindrome is an apt description for the firm, which retains the same investment team and thesis but is now armed with a large pot of capital.

Menlo Ventures raises a $450 million 14th fund for early-stage investing and opens a San Francisco office.

Bill Maris, former CEO of GV, raises $150 million for his new venture firm, Section 32. Section 32 will invest in a variety of industries, from healthcare to agriculture technology.

June

New Enterprise Associates raises $3.3 billion in commitments for its 16th fund, as Peter Barris is named chairman while remaining a general partner. The fund is the firm’s fifth fund of $2 billion or more and it is also the largest vehicle raised by the venture fund. Two years earlier, NEA raised $2.8 billion for Fund 15 along with a $350 million opportunity fund.

Jawbone begins liquidation proceedings, after raising $591 million in funding from investors Andreessen Horowitz, Khosla Ventures, Kleiner Perkins Caufield & Byers, Sequoia Capital and Silver Lake Partners since its founding in 1998.

CRV adds Dylan Morris as a general partner to help build out its bioengineering practice. The move comes as CRV, long known for its tech and consumer-facing deals, begins focusing on bioengineering, a trend emerging at a few other VC firms.

Sexual Harassment Hotline VC
Sexual Harassment Complaint Form. Photo courtesy of bdStudios/iStock/Getty Images

In late June, six women speak to the Information about stories of sexual harassment involving Justin Caldbeck, co-founder of Binary Capital, setting off a domino effect in which several other male VCs are accused of sexual harassment. Caldbeck quits the firm and Matt Mazzeo, who was due to come over from Lowercase Capital, also resigns from Binary.

July

Dave McClure, under pressure for alleged inappropriate behavior toward women, resigns from 500 Startups, the firm and accelerator he co-founded seven years ago. The resignation follows an apology he posted two days earlier describing himself as a “creep” and acknowledging he made “advances toward multiple women in work-related situations.”

The New York Times article that called out McClure also spoke with entrepreneur Susan Wu who said Chris Sacca of Lowercase Capital inappropriately touched her. Prior to the Times article, Sacca, who is retiring from venture capital, issued an apology.

Ignition Partners says it forced the resignation of Managing Partner Frank Artale after receiving a complaint of misconduct.

Immigration Entrepreneur Rule Visa VC
“US visa, vintage map and passport background” Photo courtesy of belterz/iStock/Getty Images

The Trump administration plans to rescind a Barack Obama-administration proposal that would have made it easier for foreign-born entrepreneurs to launch their companies in the U.S. According to a Department of Homeland Security notice on the Federal Register’s website, the rule has been delayed until March 14, 2018, and will likely be rescinded. The rule was scheduled to go into effect on July 17.

Canaan Partners says it has closed on $800 million in commitments for its 11th fund. It is the largest fund for the 30-year-old firm.

August

Tom Frangione, COO of Greylock Partners, steps down at the firm’s request, after it came to light that he had an inappropriate relationship with an employee at the firm, what Greylock called a “lapse of judgement.”

SoftBank invests more than $4 billion in New York-based WeWork, a provider of shared office space that is seeking to expand worldwide.

Digital-currency exchange Coinbase raises $100 million in Series D funding led by IVP, giving the San Francisco company a reported valuation of $1.6 billion. Also participating in the round were Spark Capital, Greylock Partners, Battery Ventures, Section 32 and Draper Associates. Coinbase, founded in 2012, has now raised $206 million in funding.

Ellen Pao
Former Kleiner partner Ellen Pao arrives at San Francisco Superior Court March 24, 2015. REUTERS/Robert Galbraith

Two years after the legal battle between Ellen Pao and her former employer Kleiner Perkins Caufield & Byers played out publicly over allegations of gender discrimination and workplace retaliation, Pao begins telling her story. Pao, now a partner at Kapor Capital, publishes an excerpt from her upcoming book, “Reset,” online in the New York Magazine’s The Cut and begins a book tour.

Mamoon Hamid, general partner, Kleiner Perkins
Mamoon Hamid, general partner, Kleiner Perkins.

Mamoon Hamid, an investor in Box, Slack and Yammer, joins the venture team at Kleiner Perkins Caufield & Byers as a general partner. Hamid was most recently general partner at Social Capital, which he co-founded nearly six years ago, and before that was a partner at U.S. Venture Partners.

September

Juicero calls it quits prior to the Labor Day weekend. The San Francisco company raised a combined $1.27 billion in venture funding from Artis Ventures and others before closing.

The late-stage and growth-equity investor IVP wraps up its 16th fund with $1.5 billion in commitments, the largest in the firm’s 37-year history.

Fund Performance Money Pile VC
“a pile of American money, bank wrapped in $20, $50 and $100 denominations” Photo courtesy of LawrenceSawyer/iStock/Getty Images

Swiss foods giant Nestle agrees to buy a majority stake in VC-backed Blue Bottle Coffee, the Oakland specialty-coffee roaster, which raised $120 million in venture capital from True Ventures and others. Terms weren’t disclosed, although various reports say Nestle, owner of Nespresso, spent from $425 million to as much as $500 million for the 68 percent stake.

Kik, the anonymous social-media app founded in 2009 by University of Waterloo students, says it is raising $125 million by selling digital tokens called Kin. Of that total, $50 million was raised from such institutions as Pantera Capital, Polychain Capital and Blockchain Capital. The rest was expected to be raised through a token-distribution event, which launches Sept. 12.

Social Capital Hedosophia Holdings, a blank-check company formed to acquire a large private technology company, raises $600 million by offering 60 million units at $10, exceeding its $500 million initial target. Social Capital Hedosophia, which trades on NYSE under the symbol IPOA.U, will operate as a special purpose acquisition company with Social Capital CEO and Founder Chamath Palihapitiya serving as chairman and CEO of Hedosophoia.

In a switch, and perhaps for the first time, venture funding for New York metro area startups in the third quarter tops that going to VC-backed San Francisco and North Bay companies, as the heavily financed WeWork gave the Big Apple a boost.

Elizabeth Yin and Eric Bahn, former partners with 500 Startups, seek to raise $50 million for Hustle Fund I, according to a regulatory filing. Yin, who previous co-founded adtech company LaunchBit, resigned from 500 in the summer over the way the organization handled the sexual misconduct allegations toward co-founder Dave McClure.

San Francisco-based IDG Ventures rebrands as is now known as Ridge Ventures. As a newly independent firm, it then adds Ben Metcalfe, formerly of WP Engine and Uber, as its first-ever principal.

October

Seed-stage investor Ben Narasin joins New Enterprise Associates as a venture partner. The move to NEA comes a couple of months after Narasin left Canvas Ventures, where he had served as a GP for less than two years.

People VC
Ben Narasin, venture partner, NEA. File photo from Canvas Ventures.

At its Batch 22 Demo Day, 500 Startups says it updated its sexual harassment policies, established a hotline for reporting, and emphasized staff training in the wake of sexual misconduct claims that led to co-founder Dave McClure’s departure in July. “Our work is far from done,” said co-founder and Managing Partner Christine Tsai, kicking off the event. “Meaningful change does take time.”

Union Square Ventures adds Rebecca Kaden as a general partner, coming over from Maveron in Seattle, where she was also a general partner. Kaden posted in a blog that she is excited to return to her hometown of New York and the local entrepreneurial ecosystem.

Afore Capital raises $47 million in commitments for its fund with a dedicated focus on pre-seed. Most deals will range from $300,000 and $400,000, which years ago was typically the size of a seed deal.

Menlo Ventures says Greg Yap has joined the firm as a partner to lead investments in life science companies. The firm plans to put 15 percent of its $450 million Menlo XIV into the space.

November

Steve Jurvetson announces in a tweet that he will leave the firm he co-founded, Draper Fisher Jurvetson, to focus on personal matters. Those matters included “taking legal action against those whose false statements have defamed me.” The departure comes as Jurvetson is investigated by DFJ for sexual harassment. The firm acknowledges that during the summer it became aware of indirect and second-hand allegations against Jurvetson.

Steve Jurvetson, Draper Fisher Jurvetson, private equity, venture capital, sexual harassment
Photo of Steve Jurvetson by Oscar Urizar, Red Eye Collection, for Buyouts Insider’s VCJ

Mobius Network announces it has received a $500,000 investment from Camp One Ventures days before its digital token sale is scheduled to begin on Nov. 22. The San Francisco company is aiming to raise $39 million through an ICO of its MOBI token to fund operations and hiring. The blockchain company provides a universal API that allows developers to build consumer-facing applications using cryptocurrencies.

SoftTech VC rebrands and is now known as Uncork Capital as it creates a new identity for the 13-year-old firm.

December

The Securities and Exchange Commission obtains an emergency asset freeze to stop an ICO by the PlexCorps company, which the agency says falsely promised investors a 13-fold profit in less than a month and had raised as much as $15 million since August, a news release from the agency said.

Andreessen Horowitz unveils a $450 million second biotech fund targeting the intersection of biology and engineering, part of a growing trend by some venture firms, including Menlo Ventures and CRV.

Lawsuit VC
Hyperloop One co-founder Shervin Pishevar speaks before a propulsion open-air test at Hyperloop One in North Las Vegas on May 11, 2016. REUTERS/Steve Marcus

Shervin Pishevar resigns from Sherpa Capital, the firm he co-founded, in the wake of accusations of sexual misconduct, according to a statement. Bloomberg reported that five women accused him of unwanted sexual advances. Pishevar denied the claims and in his statement said he would continue his legal battle against those “unjustly orchestrating the smear campaign.”

Bill Maris sets out to raise a second venture fund for his firm, Section 32, only seven months after raising the first, according to a regulatory filing. Maris aims to raise $250 million for Section 32 Fund 2. The firm raised a $151.3 million fund in May and was almost fully invested with deals in healthcare, cryptocurrency and elsewhere.

A consortium led by SoftBank and which includes Dragoneer Investment Group, TPG, Tencent Holdings Ltd and Sequoia Capital, agreed to purchase a stake in Uber that values the startup at $48 billion. SoftBank will reportedly put $1.25 billion directly into the San Francisco company at a higher valuation of about $70 billion. The cash infusion comes as SoftBank reportedly eyes an IPO in 2019.

Photo of years in semicircle with red 2017 courtesy of Oakozhan/iStock/Getty Images

Update: The above timeline was updated to include the Uber deal in December