Year in Review: Timeline

A look back at the VC industry’s key news events in 2006.

January

Amit Yoran

takes over In-Q-Tel. The position requires a lot of traveling, so Yoran quits in May to spend more time with his family. In November, he then joins network forensics company NetWitness Corp. as CEO.

The Ohio Bureau of Workers’ Compensation releases a report by Ennis Knupp & Associates on its private equity fund holdings. The report does not include anticipated portfolio-level information, but was nonetheless riddled with mistakes and a majority of the pension fund’s GPs protested. OBWC’s private equity portfolio remains on the secondary auction block at year-end.

ITA Software raises $100 million in first round funding led by Battery Ventures. It is the first of 10 VC deals to close in 2006 of $100 million or more.

Prism Venture Partners reorganizes, as Woody Benson asserts more control over firm operations.

Mike Moritz tops John Doerr on the annual Forbes Midas List.

Jennifer Gill Roberts, formerly of Sevin Rosen Funds, and Marc Friend, a onetime GP at U.S. Venture Partners, start a new fund called Maven Venture Partners. In August, Friend drops out as fund-raising is slow. Then, Gill’s father, Jack Gill, co-founder of Vanguard Ventures, joins the team.

FebruaryAmerican International Group sues former members of AIG Capital Partners team, including group founder Peter Yu. The two sides settle out-of-court, with AIG ultimately securing the Dubai World ports deal and Yu and company forming The Cartesian Group.

Pennsylvania launches Innovative Venture Guarantee program, to promote in-state VC investment.

Vonage files for $250 million IPO. It ultimately raises $530 million, but is widely viewed as one of the year’s most disastrous offerings.

NASA forms early stage venture program called Red Planet Ventures to invest $75 million in space related startups over the next five years. In September, the agency taps Peter Banks, co-founder and former partner of XR Ventures in Grand Rapids, Mich., to head the VC unit.

Blog rumors abound that a new MVNO named Xero Mobile has raised startup funding. It hasn’t, but competitor Amp’d Mobile will confirm two months later that it has added $150 million.

Kleiner Perkins Caufield & Byers raises $600 million for fund XII, including $100 million that’s earmarked for cleantech, or what it calls “green tech” deals. The firm also raises $200 million for a Global Pandemic Preparedness fund.

Brazil approves exemption of 15% capital gains tax for VC investments.

American Capital Strategies forms IT-focused venture capital group, with Tony Abate (formerly of Battery Ventures and Ironside Ventures) and Andy Fillet (Advent International) at the helm. Abate and Fillet soon leave, but the ACS group remains.

Redpoint Ventures raises $400 million for its third fund, even though the first two have negative returns. LPs hang their hopeful hats on more deals similar to MySpace.

March

Most biotech-focused partners of TL Ventures spin out to form new firm. A trio of IT partners follow.

Alan Patricof, of Apax Partners, launches Greycroft Partners, a $50 million VC firm focused on early stage digital media opportunities.

Polaris Venture Partners closes a $1 billion fifth fund to invest in early stage tech and life sciences.

Mobius Venture Capital stops making new investments, and eventually gives up plans to raise another fund.

VC-backed fuel cell maker Neah Power Systems goes public via a reverse merger with a shell company for a pornography website.

Wheels of Zeus, a hyped GPS company founded by Apple Computer co-founder Steve Wozniak, shuts down. Woz moves on to write a book and raise a SPAC. The VCs just move on.

Facebook reportedly turns down a $750 million buyout offer, but it refuses to sell for less than $2 billion. It soon raises $25 million in a second round of funding at a $550 million post-money valuation.

April

A team of MBA candidates from The University of Washington wins the international Venture Capital Investment Competition.

Ex-VC Chris Gabrieli enters the race for Massachusetts governor. He doesn’t make it through the Democratic primary.

Invesco suffers several high-level defections from its fund-of-funds group, after not allowing the team to spin out into an independent entity.

Benchmark Capital poaches Peter Fenton, 33, from Accel Partners.

Intel Corp. initiates a company-wide strategic review, which ultimately leads to dozens of resignations/layoffs at Intel Capital.

MaySequoia Capital subsumes India-based VC firm Westbridge Capital Partners, to form Sequoia Capital India. Sequoia also begins raising a new fund, but bans all funds-of-funds from participating.

Draper Fisher Jurvetson begins raising its first late stage fund that includes firm co-founder John Fisher, former AOL CEO Barry Schuler and VC Mark Bailey.

VantagePoint Venture Partners blocks LP from selling VPVP fund stakes on secondary market, until it is informed of the sale price.

June

Electric car company Tesla Motors of San Carlos, Calif., raises $40 million in Series C funding. India-based electric car REVA will raise VC funding from firms like DFJ in December.

IDG stops funding European team, which buys out the existing portfolio assets and reorganizes as Acacia Capital Partners.

Baker Capital invests another $12 million in Wine.com. Even drunks shake their head in depressed amusement.

Bill Burnham, onetime managing director at Mobius venture Capital, raises $10 million for Inductive Capital, an investment fund targeting public companies.

IDG plans $150M India fund

IDG founder and Chairman Pat McGovern says that IDG Ventures will continue its global push by launching a $150 million fund to invest in India. To lead the firm, McGovern appoints as managing general partner Sudhir Sethi, who once led investments in India for Walden International.

JulyClearwire, a Kirkland, Wash.-based high-speed wireless broadband services provider, raises $900 million in venture backing, with $600 million coming from Intel Capital.

New Enterprise Associates closes fund 12 with $2.5 billion.

Greylock closes its first Israeli fund, at about the same time that Israel declares war on Lebanon.

Real estate listing company Zillow.com raises $25 million, which is about what many of the $250,000 houses are “valued” at in the company’s early days.

VinaCapital plans to raise $50 million for third fund, another sign that VC is taking hold in Vietnam.

AugustAltra Inc., a Los Angeles-based developer of renewable fuel projects, raises more than $120 million in second round funding.

HuffingtonPost raises about $5 million, following earlier blog company GigaOm and PaidContent which also receive funding.

The Financial Times reports that LBO firms should consider buying Microsoft. It’s absurd, but one more indication that buyout pros have swiped the financial rock star mantle from venture capitalists.

Adam Aircraft, an Englewood, Colo.-based maker of carbon composite aircraft for the twin piston and very light jet markets, raises $93 million in Series F funding led by DCM-Doll Capital Management. Not the biggest deal, but one of the more unusual.

True Ventures closes inaugural fund at about $155 million.

Silicon Valley pioneer Pitch Johnson, founder of Asset Management Co., reveals plans for a $75 million tech fund in Russia.

SeptemberDraper Atlantic Ventures drops the “Draper,” and subsumes DFJ New England.

Greg Case and Paul Vais announced plans to leave Apax Partners, as the firm continues to move away from early stage investing. The firm also plans to shut Silicon Valley office.

Cilion, a Menlo Park, Calif.-based ethanol producer, raises about $170 million in second round funding.

Georganne Perkins joins Fisher Lynch Capital as a managing director, after having served as director of private equity for the Stamford Management Co. One day later, UTIMCO CIO Bob Boldt steps down.

Cortina Systems Inc., a Sunnyvale, Calif.-based provider of analog and digital ICs, raises $132 million in fourth round funding.

LPs pull commitments from Los Angeles-based ITU Ventures, due to staff departures and the firm allegedly soliciting political contributions from their portfolio companies.

Pacific Corporate Group loses four senior managers from its advisory practice, and will later lose another three. The firm that each year appears to be on the brink of collapse just keeps teetering.

The Securities and Exchange Commission obtains a temporary restraining order against AA Capital Partners, a Chicago-based fund-of-funds manager, for allegedly misappropriating at least $10.7 million from its six union pension fund clients

Demand Media Inc., a Santa Monica, Calif.-based acquirer of online content sites and generic Internet domain names, raises $100 million in second round funding. It was formed earlier in the year in a $120 million infusion from Oak Investment Partners, Spectrum and Generation Capital Partners.

Christopher Darby joins In-Q-Tel as president and CEO. Darby comes to the firm from Intel Corp., where he was vice president and general manager.

OctoberSevin Rosen Funds indefinitely suspends fund-raising, after declaring that the traditional VC model is “severely damaged.”

Google Inc. agrees to acquire online video-sharing company YouTube Inc. for about $1.65 billion in stock. YouTube had raised $11.5 million over two rounds of VC funding, from Sequoia Capital and hedge fund Artis Capital Management.

Don Wood leaves Vanguard Ventures, dropping the firm’s number of active partners to just two.

Mark Warner, co-founder of Columbia Capital and former Virginia governor, says he will not run for president. Ex-Bain Capital chief Mitt Romney has no such reticence.

PowerShares launches an ETF for private equity-related securities.

Bank of America Ventures begins plans to spin out from parent bank.

Boston Celtics owner Wyc Grousbeck rejoins Highland Capital Partners, but this time as a venture partner.

EPlanet Ventures, a onetime DFJ affiliate, goes to market with a $550 million target. It is its first fund since it parted ways with DFJ at the beginning of the year.

NovemberCharles River Ventures launches QuickStart program for seed stage companies.

North Bridge Venture Partners launches growth equity fund.

The peHUB.com launches. It is owned by Thomson Financial (publisher of VCJ)

Second Life hosts business plan competition, with real-life VCs as judges.

Stan Shih, founder of the Acer Group, announces that he is raising a Taiwanese fund, Branding Taiwan Venture Capital, with a target of about $61 million.

U.S. chipmaker Xilinx Inc. launches $75 million corporate VC program to invest in the programmable device market in the Asia-pacific region.

December

The Teacher Retirement System of Texas considers plan to form $600 million direct investment fund.

Jason Calacanis joins Sequoia Capital as an “entrepreneur-in-action.” Calacanis, who previously co-founded Weblogs, resigned as general partner of AOL Netscape a few weeks earlier.

The U.S. Congress adjourns without taking action on a bill dealing with net neutrality.

The Founders’ Fund, a VC firm led by former PayPal CEO Peter Thierl, hired Sean Parker as partner. Parker co-founded Napster, Plaxo and Facebook.