Raj Abhyanker, a lawyer and film producer, claims that an entrepreneur-in-residence at Benchmark stole his idea for a neighborhood social network, and used his concept to launch the site Nextdoor.com. Now, he wants the public to contribute $10,000 to shine light on whether such entrepreneurs (veteran business people who work in big capital firms) take unfair advantage of their access to ideas.

The concept is an intriguing one. Silicon Valley has no shortage of people who are convinced others stole their idea to make a fortune (anyone remember the Winklevii?). And it’s true that the powerful venture capital firms of Sand Hill Road are privy to a steady stream of cutting edge ideas — no doubt they have cribbed or outright stolen a few of them. A little sunshine on the subject would be good, no?

Alas, our would-be whistleblower is, to put it politely, a flawed protagonist. As AllThingsD reported last year, there are some serious holes in Abhyanker’s story about Nextdoor; he has also tried — and failed — to claim credit for concepts like Facebook’s “Like” button. And, in the latest development, Nextdoor is now suing Abhyanker for cyberpiracy and trademark infringement (Abhyanker claimed to me that the lawsuit means he has turned the tables on Nextdoor; the company said by email his claims have no merit).

Meanwhile, Abhyanker’s own entrepreneurial cred appears dubious too; career site Glassdoor contains entries for his firm like “Horrible place even for a caged animal” and “‘cut and paste’ other people’s ideas with cheaper and abused Indian labor type of guy.”

You can see the Kickstarter project here — a $50 pledge gives you “OWN THE MOVE + JOIN THE EXPERIENCE + STICKER.” So far, there are no backers.

(Image by Crepesoles via Shutterstock)

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These deals don’t really tell the story of Gurley. I first met him when he was a former Wall Street analyst and our relationship began with me questioning his analysis. He switched teams and joined Benchmark at the height of the first Internet bubble. Gurley, who in the past used to write the Above the Crowd column for C/Net, took a step out of the limelight. Of course, that is par for course, investors at white-shoe firms tend to be less public than analysts, so our interactions decreased overtime.

When I moved out to San Francisco almost a decade ago, we touched base again, and since then have made it a point to see each other at least once every quarter. He has a very unique point of view about Silicon Valley, the technology industry and the kind of companies he likes to invest in. Polite as he is, he doesn’t sugarcoat anything and has given me advice over the years that was a bitter pill to swallow at the time, but in hindsight, turned out to be exactly what I needed. The only thing we don’t agree on: his love for sports that don’t make sense to a short, somewhat rotund guy like me, basketball and college football — the American kind.

Last year Chris Albrecht and I did a lot of documentary style interviews with folks such as angel investor Chris Dixon, Square COO and angel investor, Keith Rabois and Zimbra co-founder Satish Dharmraj, but this year I took a step back, mostly because I wanted to regroup and rethink whom I wanted to interview. I wanted to bring fresh insights from people whom I respect and believe have something interesting to say. I couldn’t find anyone better than Bill Gurley to kick off this occasional series.

In this interview, Gurley talks about a whole bunch of things including the craft of being a VC, the changing VC landscape, and most importantly, his thesis around reinvention of everything local. The interview was 45 minutes, so we have made it simpler by creating six chunks for easy consumption. We will post the entire interview later. Enjoy the videos.

What it takes to be a VC.

What is the role of a VC? Questions every entrepreneur should be asking.

How network effects reshape local commerce.

What it takes to survive downturns.

Beyond the obvious: What are the opportunities in venture capital?

On Above The Crowd [Slight audio issue here.]

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Polyvore’s website, which allows users to create fashion collages online with images clipped from any online store, now attracts 10 million unique visitors per month, making it the most-visited fashion website on the web today, Lee said. By comparison, Style.com, the popular fashion news and photo website run by Condé Nast’s Fairchild Fashion Group, reportedly receives some two million monthly unique visitors.

Polyvore was launched in February 2007 by Lee, a former product manager at Google, and two former Yahoo engineers, Guangwei Yuan, Jianing Hu and Pasha Sadri. Polyvore’s current status at the top of the fashion heap — and the fact that it’s been able to make a lot of money on the way there — may come as a surprise to some of the startup’s early naysayers. “When I left Google four years ago, everyone told me I was crazy,” Lee said. “Fashion and e-commerce was just not a hot space at the time.” Since then, companies like Gilt Groupe and Groupon have led the fashion industry and its fans to become more tech-savvy than ever, she said, and Polyvore has grown in kind.

The sector’s success has brought a number of similar sites, such as Courturious and Looklet, into Polyvore’s space. But Polyvore plans to retain its edge by staying true to its geeky roots. “The thing that differentiates us is that we’re a tech company that happens to be in fashion, not a fashion company that has technology. Our focus is really on building the product,” she said.

In that vein, fully 50 percent of the company’s 23 employees are in engineering, and it currently has just two full-time salespeople. Although the company is more focused on revenue than ever before, Lee says Polyvore has no plans to change its tech-centric company culture.

Polyvore’s product-first strategy seems to be paying off: An eighth of Polyvore’s audience comes back to the site more than 100 times per month. “From an engineering standpoint, it’s almost like building a game. Our community is very engaged, and very addicted,” Lee said.

And that engagement is making more and more advertisers take notice. One source of revenue for the company is running sponsored campaigns encouraging users to make collages with products from a specific brand or store. “A lot of advertisers are looking to work with us vs with media sites,” Lee said. “Our viewers are very focused on fashion, so there’s audience specificity. We also have a lot of incredible engagement, which advertisers love.”

When a startup becomes profitable, potential acquirers often take particular notice. When asked about Polyvore’s new position as a potential takeover target, Lee acknowledged that larger tech firms have shown a growing interest in the fashion space, with Amazon’s acquisition of Zappos and Google’s launch of Boutiques.com. But she said that while Polyvore does receive interest from potential bidders, the company plans to keep its head down and focus on continuing to grow independently for the time being.

“Social commerce is an interesting space, but I don’t think anyone’s doing it well online,” she said, noting that less than nine percent of clothing shopping is done online, compared to 50 percent of computer shopping. “There’s really an opportunity there to build the right kind of commerce platform for fashion.” Judging by its growth thus far, Polyvore may well be the company to do just that.

Image of Polyvore co-founder Jess Lee courtesy of the company

Ed. A previous version of this article omitted Co-Founder Jianing Hu.

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While much hay in investment circles has been made over “the death of the IPO” and the emergence of the M&A as the future end game for venture capitalists, Gurley doesn’t see it that way at all.

It’s true that household-name, blockbuster internet IPO’s have been on the decline since the first dot-com bubble. Meanwhile, for much of the past decade, big players like Google, Apple and Microsoft have been gobbling up companies at a ferocious pace. The market  naturally came to rely on mergers and acquisitions.

But these public giants are not making the large-scale acquisitions they once did. Conversely, says Gurley, the IPO market is already showing healthy signs of delivering. He looks to recent successful public offerings such as Green Dot, Opentable, Ancenstory.com   and Solarwinds to name a few. Meanwhile, companies like Kayak, Groupon, HomeAway and others are expected to hit the public market soon.

For Gurley, today’s high-profile LinkedIn IPO should put to rest any lingering belief that the IPO window is still slammed shut– regardless of how the stock performs in the future.

“There has been this malaise in the valley that the IPO market was dead,”  Gurley says.” The last remaining naysayers will finally have to put that to bed. For some people, today will be a wakeup call, it has to be.”

Public investors, like the buyers of mutual funds, are craving IPO’s for the access to growth they represent. ”The buy side of the market has been desperate for more product,” Gurley says.

But from the startup side, the reticence to go public is still hanging over the bay area like so much fog. Gurley and others argue Facebook founder Mark Zuckerberg’s famously coy attitude towards an IPO has helped fueld the perception that going public is a buzz kill.

“There is still a strong sentiment among many people in Silicon Valley that’s its much better to stay private if you can,” in order to keep total control of  the company and avoid the hassles of  shareholders to worry about, said Mike Volpi, a partner in the London office of Index Ventures.”Obviously, Mark Zuckerberg is a strong influence.”

Gurley elaborates: “Zuckerberg is a popular and well respected figure, so his decisions hold weight. But most companies aren’t Facebook,” he says. And now, with the market primed for more big ticket IPOs, the following  potential IPO candidates won’t be able to hide behind the idea of a market not ripe for their arrival, he said.

Still, after today’s valuation, Gurley also cautions the market from getting over eager and throwing more dollars at future offerings than they are worth.

LinkedIn is unique asset because it has no real competitors, very heavy barriers to entry, high profit margins, completely organic traffic growth with little in the way of marketing. It also has no dependencies.

“It doesn’t live on the back of Facebook, Google, Microsoft,” he said.

Gurley isn’t the only venture capitalist who predicts an IPO tipping point as a result of recent activity.

Manu Kumar, founder of K9 Ventures, compares the LinkedIn IPO  to the Netscape IPO “before Bubble 1.0 or the Google IPO post-Bubble 1.0.” He thinks LinkedIn could set the stage for other companies that are sitting on the edge of filing for their own public offering. Meanwhile,  the liquidity created by these successes (either in the public market or in the secondary market) will hopefully  increase the amount of money flowing into the startup ecosystem.

Of course, Kumar should have a great affinity for LinkedIn. The co-founder of CardMunch sold his startup to LinkedIn in January of this year.

“The startup eco-system has been anxiously awaiting for another beacon and another indication that things are live and well,” he said. “The excitement around the LinkedIn IPO has the potential to do just that. Kind of a “we’re back” signal to startup entrepreneurs who are sitting around trying to hatch their own startup dreams.”

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The news is good for both Zipcar, which needs the funds to expand its user base, as well as Zipcar’s early investors, including Benchmark Capital, Greylock Partners, Smedvig Capital, and AOL founder Steve Case’s Revolution LLC. The bullish pricing is also positive news for the future of car sharing, an early-stage industry that now includes a lot of city dwellers and college students who essentially use cars as a service, instead of owning them outright.

Zipcar, which has 560,000 members and was founded in 2000, filed for a planned IPO last June. Then back in December, the company raised $21 million in private financing, which — at least in my mind — called the planned IPO into question. That summer S1 came on the heels of Zipcar arranging to borrow $70 million under a one-year credit facility for the purchase of new cars for its U.S. fleet (through Zipcar Vehicle Financing, a wholly-owned subsidiary), and also came about six weeks after Zipcar acquired its largest competitor in the U.K., a car sharing provider called Streetcar.

Running a car sharing service is expensive and a high-capital business. Maintaining the fleet and buying new cars, sucks up a major portion of the sales. For the year ended December 31, 2010, Zipcar generated revenue of $186.10 million, with a net loss of $14.12 million. As of December 31, 2010, Zipcar had an accumulated deficit of $65.4 million, and in the company’s risk factors the S1 says, “We expect to incur a net loss in 2011. We do not know if our business operations will become profitable or if we will continue to incur net losses in 2012 and beyond.”

As of September 2010 (when I did this analysis), Zipcar had 8,541 cars in its fleet, most of which it leased, but 1,692 of which it owned outright. The Zipcar fleet is routinely being turned over, and that requires access to capital. Zipcar only keeps its cars, on average, two to three years, after which it sells the cars to the used car market. Zipcar is also constantly removing cars and adding cars to its fleet depending on seasonality (busier in summer and spring) as well as meeting its expansion plans. That’s a whole lot of vehicle financial transactions.

To move to lower-cost vehicle turnover and growth, last spring, the company established “Zipcar Vehicle Financing LLC, or ZVF,” which is “a special purpose entity wholly-owned by Zipcar,” that will be used to purchase vehicles. ZVF currently has $70 million available for vehicle purchasing, and Zipcar plans to increase the amount of owned vehicles in its fleet, compared to the amount of leased vehicles, which can provide a lower-cost way to manage its fleet.

Car sharing needs a lot more members to make it profitable, but analysts have been predicting the market will grow. According to Frost & Sullivan, the revenue from car sharing programs in North America will increase to $3.3 billion in 2016, up from $253 million in 2009.

A next generation of car sharing startups has already emerged in recent months focused on building car sharing around personal vehicles (owned by people in your community or neighborhood instead of an entity like Zipcar). Those companies include RelayRides, GetAround, and Spride Share, and if you come to Green:Net 2011 on April 21 in San Francisco, you can hear from RelayRides CEO Shelby Clark and Spride Share founder Sunil Paul. Think of neighbor-to-neighbor car sharing as Zipcar without the large capital overhead.

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