Term Sheet — Monday, November 17

By November 17, 2014 Bitcoin Entertainment
Click here to view original web page at fortune.com
  • E-mail
  • Tweet
  • Facebook
  • Google Plus
  • Linkedin

Share icons

Back during the great Ebola Panic of October 2014, I read the following tweet from Silicon Valley academic Vivek Wadhwa: "Imagine if SV focused on detecting Ebola and developing cures for infectious diseases. Big data, Syn bio, sensors, ...all can be combined."

To which I immediately thought: Wait a minute. Didn't venture capital firm Kleiner Perkins try to do this very same thing in 2006, when it raised $200 million for what it called the Pandemic and Bio Defense Fund? According to a press release, its goal was to "accelerate innovations for worldwide pandemic preparedness and global health over the next three years, with a focus on surveillance and detection, diagnostics, vaccines and drugs."

The fund launched with the announcement of an investment in publicly-held BioCryst, which later had an emergency-use swine flu drug approved in 2009, and also has been working on an Ebola vaccine. It later would back such companies as flu-focused NovaVax, which also has an Ebola drug in the pipeline, and Trius Therapeutics, a developer of superbug antibiotics that was acquired for more than $700 million by Cubist Pharmaceuticals.

But that three-year investment period is long past, and Kleiner Perkins never raised a follow-on fund. So what happened? Is this stuff just too hard and/or unprofitable for Silicon Valley venture capitalists to pursue? Must they instead occupy themselves with the bits side of these problems, and leave the molecules to someone else?

To get some insights, I spoke with Beth Seidenberg, a healthcare-focused partner with Kleiner Perkins who helped to manage the Pandemic and Bio Defense fund. My takeaways from our interview can be found here.

Answer key (kind of): Back in August, I asked you to name the Bitcoin startup that was in talks to raise big new money from a corporate investor? One of your hints was that the overall round could be the largest-ever deal for a bitcoin startup.

The answer was Coinbase, but things might have changed a bit. Re/Code reported late Friday that the company was nearing a $60 million infusion at a $400 million valuation led by DFJ (likely via its Growth unit) and didn't mention anything about a corporate. I'll do some digging today to figure out if my initial info was off, or if the corporate investor backed out. For what it's worth, $40 million would tie Coinbase with Xapo for the largest investment round for a Bitcoin-focused startup.

• Pinch-hitter: Mode Media(f.k.a. Glam Media) has quietly made a board switch, with Heidi Roizen replacing her DFJ colleague Tim Draper.

Too rich for their Botox: Actavis (NYSE: ACT) this morning announced an agreement to buy Botox maker Allergan Inc. (NYSE: AGN) for approximately $66 billion, or $219 in cash and stock. Valeant Pharmaceuticals and Bill Ackman haven't officially bailed out of their hostile takeover attempt yet, but it seems to be coming. In a statement, Valeant CEO Michael Pearson said: "Valeant cannot justify to its own shareholders paying a price of $219 or more per share for Allergan."

• Not holding my breath: James Stewart wrote in the NY Times yesterday that the incoming GOP Congress should change the tax treatment of carried interest, as a sort of proof that it can work on tax policy from a bipartisan perspective. A columnist can dream, I guess, but it's worth pointing out that a Democrat-controlled Congress couldn't get this done with a recently-elected President of the same party.

• Just asking: There was a lot of talk over the weekend about how Facebook is trying to get into the enterprise chat and collaboration game, by launching a new platform that could compete with everyone from LinkedIn to Jive to Google (Drive). But the real target would seem to be Slack, the fast-growing startup that just raised $120 million at a valuation north of $1 billion.

So here's my question: When has an incumbent tech company successfully "killed" a popular startup by aping its primary product? This is different from generically asking when a popular startup has failed, and goes to the age-old venture capitalist question to entrepreneurs: Well, couldn't Google/Facebook/Amazon build this?

One possible answer here could be Microsoft vs. Netscale, while another could be Amazon vs. Quidsi (a.k.a. Diapers.com), although the former was fraught with regulatory questions and the latter seemed more an acquisition strategy than product innovation. Moreover, I don't think Facebook has ever succeeded in such efforts, despite multiple attempts. Anyway, interested to know what I'm missing...

Tweet

Facebook Google Plus Linkedin Share iconsBack during the great Ebola Panic of October 2014, I read the following tweet from Silicon Valley academic Vivek Wadhwa: "Imagine if SV focused on detecting Ebola and developing cures for infectious diseases. Big data, Syn bio, sensors, …all can be combined."To which I immediately thought: Wait a minute. Didn’t venture capital firm Kleiner Perkins try to do this very same thing […]

Leave a Reply