• December 17th, 2007

    Founders Fund Closes $220 Million Second Fund

    San Francisco based Founders Fund launched in 2005 with a $50 million venture fund. They’ve had two liquidity events since then, and a handful of other very high profile investments (Facebook, Powerset, Ooma, Quantcast, Slide, Geni, Causes, etc.). Today they will announce a second fund, Founders Fund II. It’s much larger – $220 million. And unlike the first fund, the money comes mostly from outside investors. The new fund will allow Founders Fund to make 15-20 new investments, including pro-rata investments in follow on rounds. A couple of investments have been made out of the new fund, they say, but have not yet been disclosed. Founders Fund partners have deep connections in Silicon Valley, which help with deal flow (Peter Thiel, founder and former CEO of Paypal, Ken Howery, founder and former CFO of PayPal, Luke Nosek, founder and former Vice President of PayPal and Sean Parker, founder and former CEO or President of Napster, Plaxo and Facebook). But they also approach deals differently than most other funds. Sean Parker said today in a phone interview that a glut in venture capital, combined with reduced capital needs of most startups, has led to a shift in balance of power between entrepreneurs and VCs. Founders Fund recognizes that shift and has evolved does deals a little differently because of it. For example, they invented and promote the issuance of a special class of stock, called Series FF, which allows entrepreneurs to take money off the table much earlier in their company’s lifecycle. They also allow significantly more liberal voting rights to founder board members than many other funds. See this article in the SF Chronicle earlier this year for more on how they do business. CrunchBase Information Powerset ooma Quantcast Slide Geni Causes Information provided by CrunchBase → Read More

    December 5th, 2007

    Buy A Virtual Gift And Fight Malaria

    Causes is one of the most popular Facebook Applications, with over 300,000 active users. The service, which leverages virality to spread the word about worthy causes, aggregates 40,000 causes that benefit 13,000 nonprofits worldwide. In many ways, it’s a pyramid scheme for good. Now founders Sean Parker and Joe Green are leveraging another phenomenon to increase participation even further: virtual gifts. Facebook has been selling them since February this year. A number of unofficial virtual gift applications created by third parties have also launched on Facebook. Clearly, they are here to stay. Facebook says 24 million of them have been given away through the official application alone (although many of them were free). But now you can give a gift that says a little more than “I spent a dollar on you.” With Gifts from Causes, you can give a $10 – $200 gift to a friend. Each virtual gift (see image below) benefits a different charity. 100% of the proceeds (minus only credit card fees) go directly to the charity. $10 gives two blankets to people in a disaster area. Or one insecticide-treaded bed net to a child in Africa to fight Malaria. Or a soccer ball to a poor child. etc. So the next time you want to send your boyfriend a rose, think about spending $15 instead and sending him a teddy bear. In the real world, a sick child will receive a real teddy bear, thanks to your generosity. → Read More

    November 23rd, 2007

    How do you gently withdraw your support from a good cause on Facebook?

    In discussing several things with my brother this Thanksgiving weekend, including what happens to human beings once the sun runs out of hydrogen and what presidential candidate is best prepared to deal with a Texas-sized asteroid hurtling toward Earth (what are we gonna do, blow it up and have several little asteroids hurtling toward us?), he brought up something Facebook-releated. See, he doesn’t join groups promoting a cause (“FreeRice,” for example) because he doesn’t want to be seen leaving the group later on, privacy settings notwithstanding. What, you don’t support feeding starving people anymore, you jerk? It’s a social phenomenon. How do you show your support for a cause on Facebook without later being seen retracting your support? It’s something I think needs addressing, along with the pocket veto, a term I coined some time ago describing friend/group/whatever rejection without rejection. I think it’s time for leftover turkey stuffed inside leftover turkey. Facebook → Read More

    May 24th, 2007

    Causes On Facebook Launches

    We wrote about Project Agape, a new startup that is applying viral principles to altruism and social causes, in late March (“Project Agape” is a working name for the service, it is yet to be formally named). Today, the service is launching as one of the initial Facebook Platform partners. The company was founded by Sean Parker and Joe Green and is designed to help social causes – charities, religions, political parties and candidates, etc. Integration with Facebook is very, very deep, which isn’t surprising given the founders connections to Mark Zuckerberg, Facebook’s founder and CEO. Parker was Facebook’s founding President, and Green was Zuckerberg’s college roomate. Facebook already has a popular “groups” application, and many social causes are represented as a group. Groups, however, don’t let users do much more than join. With Agape, users can create causes, take donations, and recruit members. Whenever someone creates a cause or joins one, it shows up in their news feed for their friends to see. Information about the cause is also included in the profile itself, including total amount raised by that user and new users recruited. There’s a multi level marketing approach, too. Any money donated by other users you’ve recruited is also included in your “money raised” total (see top image). Gaining status by recruiting members and getting donations will be a big incentive for users to not only join a cause that they feel strongly about, but will also get them to participate on an ongoing basis. I spoke with Green and Parker and asked them why they decided to show their service to the public for the first time via Facebook instead of launching on their own site. The answer: Facebook has a huge and active user base (20 million users, each viewing 50 pages daily on Facebook), and they are a demographic that is highly likely to want to become involved actively in causes they believe in. The hugh popularity of Facebook Groups is evidence of this, they say. → Read More

    March 29th, 2007

    Project Agape: Sean Parker To Apply Virality To Altruism

    Yesterday I sat down with Sean Parker at his offices at the Founders Fund in San Francisco to see a demo of his new and yet-to-be-named startup (the working name for the project is Project Agape). Parker is a larger-than-life twenty seven year old who co-founded Napster and Plaxo and was the founding president of Facebook. He’s been working full time on Project Agape for the last eight months, while still putting in the hours at Founders Fund as a Managing Partner. Parker knows about how to apply viral principles to ideas. Half of our 1.5 hour meeting was spent discussing these principles and how to fine tune ideas to the point where they can grow exponentially. The only thing that can stop a good viral idea is when it runs out of population, he says. If Napster, Plaxo and Facebook are any example, he just might be right. Project Agape is still under a heavy cloak of secrecy (Om Malik first got wind of the new venture a week and a half ago), although I was able to see a demo and some additional conceptual work. Parker’s goal, he says, is to apply the same ideas around virality that worked so well on his previous projects to the idea of altruism and activism. Charities, political parties and affinity groups all rely on participation from people who share the same beliefs and ideals. But recruiting and fundraising are largely stuck in the pre-Internet era: social pressure and guilt are applied to get others to donate to that marathon for the Leukemia society, or donate time working with the homeless. Parker wants to harness those proven incentive structures use his new startup to increase their effectiveness. New sites like Change.org and dotherightthing and Six Degrees help people talk about issues online, but they don’t go far enough in using virality to get new users and get them actually doing things. Parker wants the kind of activity around these organizations that Facebook sees – tens of thousands of new daily users and hours and hours of social interactions. The result, he says, will be a much more efficient engine for organizations to get volunteers and raise money. The company is based in Berkeley and will make some announcements in the coming weeks, and a beta product will be available in a couple of months. Stay tuned for more. → Read More

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