The latest buzz comes by way of the Bitcoin Boost Fund, a new Silicon Valley fund that announced on Tuesday that it will hand out $50,000 to seven or so Bitcoin startups.

All of the startups will be graduates of Boost VC, an accelerator program that seeks to mentor would-be Bitcoin barons. The accelerator, created earlier this year, is run by Adam Draper, who describes himself as a “fourth generation VC” and who is hosting a hackathon at the “Bitcoin: Future of payments” conference in San Jose this weekend.

News of the fund, which will total around $400,000, comes less than a week after Fred Wilson’s Union Square Ventures announced it would put $5 million into Coinbase, a service that lets people store and convert Bitcoin online. (See here for all the other Bitcoin buzz last week.)

So what sort of start-ups will the new Bitcoin fund support? Jeremy Liew of Lightspeed Venture Partners, another investor, offered some broad strokes:

“The way to regard any tech disruption — from cloud to big data to flash storage — is that the first generation of companies are always infracture companies, the second generation are application companies. We’re right at the cusp of moving from infrastructure to applications … Maybe international money transmissions.”

Liew added that Bitcoin is most appealing to merchants who want to impose the 3% transaction cost for payments often imposed  in the traditional financial system.

If you’re curious about Bitcoin, come join us at GigaOM’s meet-up this Thursday in San Jose — we’ll have CEOs who work in Bitcoin and engineers from Facebook and Google to discuss speculation, security and more. The event, which is filling up fast, is free thanks to our friends at Ribbit Capital, and takes place from 6 to 9 — it will include time for chat and cocktails.

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However, DowJones Venture Wire reports that in conjunction with the funding, Stion let go a “small number of people.” Cost cutting, to survive and scale, in the difficult solar market is an ongoing trend in 2012, no matter how big or small the company is.

Stion, founded in 2006, started commercial shipments of its thin film solar panels earlier this year. Stion spokesperson Frank Yang said in an email that with the $25 million in funding, Stion’s total equity funding is around $240 million.

Stion makes panels that use copper, indium, gallium and selenium (CIGS) instead of conventional silicon to convert sunlight into electricity. Other companies have struggled to scale up the manufacturing of panels that use the same materials to build solar panels, including HelioVolt, Miasole, Solyndra and Nanosolar. Stion has a Mississippi factory, which is supposed to eventually reach 500 MW of production capacity.

A year ago, Stion raised $130 million led by Korean investors – AVACO and Korean private equity funds — and the plan was to build a Korean factory and create a Korean subsidiary. Korean conglomerates seem to have the funds and interest to scale up these CIGS solar companies; Korean company SK Group also pumped $50 million into thin film solar company HelioVolt. Stion’s other investors include Khosla Ventures, Taiwan Semiconductor, Lightspeed Venture Partners, Braemar Energy Ventures, and General Catalyst Partners.

Image courtesy of Stion.

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Nabeel Hyatt, a venture partner with Spark Capital, is in a unique position to understand game design as a VC, because he began his career as a developer himself. Founder of Conduit Labs, a game studio acquired by Zynga in 2010, Hyatt then became a General Manager at the social game giant, where he led development of Adventure World.

Create games with great retention—and understand why they’re succeeding

Hyatt’s number one metric for games that interest him as investment prospects: Day-one retention, i.e. whether new users come back the next day to play. This is an especially important way for Hyatt to evaluate games he might not personally “get” himself. His rule of thumb: Anything below 13 percent day-one retention is bad, while a great target is toward the 60-percent range. (If a game remains below 13 percent after a couple months despite attempts to grow retention, it may be time to kill it.)

Hyatt also looks for teams to invest in who understand why their game is succeeding—for instance, why players are rating the game highly, why day-one retention is strong, or even something as simple as why people smile while playing the game. “That tells me a lot about their thought process,” Hyatt says. “The games companies in this new ecosystem that are doing better and better are the ones asking why.” It used to be that games would evolve every few years with the launch of a new console; now, however, game evolution cycles are happening on a near quarterly cycle. For that reason, Hyatt says, “It doesn’t matter how analytical you are or how cutthroat you are; it comes down to measuring those results to figure out how to get better.”

Pitch games that give players long-term aspirations

Hyatt puts a lot of stock in the long-term goals a game creates for a player: “What’s the aspiration of a player? What’s the thing they’re trying to build in the future? How would they imagine themselves playing the game in a year? What’s the moment-to-moment experience in order to meet the aspiration?” This isn’t just a high-minded design goal, but good business sense. After all his firm invests in games as a recurring service, not games enjoyed for a day or two then discarded.

For the company pitching Hyatt, they need to answer two key questions: Why now? Why you? “We invest in areas where there might be an opportunity for explosive growth,” he says. Most companies aren’t likely to realize such growth, so the developer must explain to him why they’re the exception.

Name your strengths as a startup—and your weaknesses

“What I want to see is an entrepreneur who understands their biggest strength and their biggest weakness and be able to talk about both honestly,” says Hyatt. Understandably, some developers in search of funding may hope to obscure their shortcomings, but Hyatt insists he would prefer if they instead face them head on, saying something like: “If yo’’re not going to invest, this is the number one reason you’re not going to invest.” Not only does this demonstrate that the developer truly understands his or her business, it also opens up an opportunity for the VC to offer suggestions and help the start-up.

There’s a corollary to this advice: The developer should know what they’re best at, and be able to explain why and how. “A small company can’t be good at one hundred things,” Hyatt says. “They can only afford to be number one in one area.”

* * *

A managing director with Lightspeed Venture Partners,  Jeremy Liew has invested in a number of successful gaming companies, including Playdom (acquired by Disney), Serious Business (bought by Zynga), and KIXEYE.

Have a plan that demonstrates repeatability and discoverability

As Liew puts it: “How do you build a hit factory?” While not every game will be a hit, a startup should have some kind of native advantage which makes their games more likely to be a hit. That could be due to a built-in audience created by a series of sequels, or a hit niche game genre with real complexity and a passionate playerbase. As an example of that, he cites KIXEYE, which focuses on core gamers who are under-served by Facebook games.

For discoverability, Liew describes the current playing field this way: Whereas in the past, game distribution used to be the bottleneck (i.e., selling games in boxes on shelves), now most games are available online, so distribution is free and easy and democratic, and development on the larger platforms is relatively inexpensive. However, this very fact makes discoverability quite crucial. “In a world where there’s tons and tons of games, how do you get to be the one people try and our talking about?” Liew says. As he notes, it’s just simply not enough to create a great game, unfortunately. “There are [already] so many great games that are sitting out there, languishing,” he notes.

Don’t just talk about how good your game is—prove it with user data

Liew says this is a common mistake, with developers insisting in the face of his skeptical questions, “Yeah, but the game is going to be awesome… that’s why it’s definitely going to work.” The hard user data shows that prediction, however, is almost always wrong. Instead, show Liew the data. He adds an adage that may be hard for developers to swallow: “Game design is not predictive… user engagement is predictive.

Wagner James Au is a game-development consultant and writes the gaming/virtual culture blog New World Notes. Follow him on Twitter @SLHamlet.

Excerpted with permission from the publisher (Wiley) from “Game Design Secrets” by Wagner James Au, copyright © 2012.  Now available in paperback and e-book (use code “GDS12″ for a 40 percent discount at checkout).

Photo courtesy of Shutterstock.

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That’s a lot of money for a storage startup, especially one that’s pursuing the appliance model in an era of build-it-yourself- commodity hardware, but investors are so confident the round was “massively oversubscribed,” and the valuation led the U.S. Securities and Exchange Commission to hold up the financing while it investigated the round, confirmed Nutanix President and CEO Dheeraj Pandey.

So what has investors so excited? Nutanix’s appliance allows companies to do two things that are important to companies on the leading edge of the scale out and virtualization shift: it allows companies to eliminate separate storage networks by virtualizing them and allows companies to move their storage closer to their compute power, which speeds up a company’s applications or response times. As my colleague Derrick Harris wrote in April of 2011 when Nutanix launched:

The key to Nutanix is virtualization, which provides the abstraction and the additional storage connections necessary to give Nutanix the performance edge it claims. The company is big on solid-state drives for performance and consolidation, but Pandey says legacy storage systems are limited to the amount of SSDs they can handle. With a virtualized computing layer, however, each virtual server and each physical node provide the requisite housing and connection to an additional SSD. The Nutanix appliance combines both SSDs and hard disk drives to achieve maximum levels of performance and affordability, Pandey said.

Nutanix has proved that customers want its appliances, noting that it has shipped 150 systems, including 600 servers attached with more than 3.3 PBs of spindle and Fusion-io storage. The additional money gives it the wherewithal to continue selling its product to more and more companies, likely with the aim for going public in the not-too-distant future.

“This round takes us to $50 million-plus in the bank, and that means we can build a company of lasting value,” said Pandey. “That’s why Goldman is involved.” Of course, when I asked Pandey about the timing of the IPO he declined to speculate.

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The company specializes in application performance management (APM), a subset of broader systems management software, that helps companies monitor and maintain availability of their key software applications.

APM has gotten trickier in this era of web services and cloud computing, where applications are distributed beyond a company’s own data center and get updated frequently. In a statement announcing the funding, Kleiner Perkins partner Matt Murphy said AppDynamics is well positioned to attack this problem.

“Applications are moving to distributed, cloud-based architectures, which is having a tremendous impact on operations and development teams responsible for performance and uptime.”

The new funding augments $5.5 million from a Series A round led by Greylock and Lightspeed in 2008; then another $11 million in Series B by the same two VC firms two years later. Asheem Chandna of Greylock Partners and Ravi Mhatre of Lightspeed led both of those earlier rounds.

APM competitors include legacy software companies like IBM Tivoli,  CA Technologies, Compuware, HP and Quest as well as newer players like New Relic.

AppDynamics, which works in both Windows-centric .NET and Java worlds, claims over 50,000 customers including Priceline.com, Netflix, Tivo, Fox News, and Taleo.

Photo courtesy of Flickr user 401K

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The company says it wants to expand in to Europe and in to two new media – video and mobile web.

The money is led by Index Ventures along with Outbrain’s previous backers Carmel Ventures and Lightspeed Venture Partners. Index’s Dominique Vidal is joining Outbrain’s board.

Outbrain already opened offices in London, France and Germany this year and has already rolled out its mobile and video service.

It says it serves 3.5 billion recommendations per month that generate 200 million monthly content clicks.

Outbrain raised $5 (£3.2) million in 2008, $12 (£7.68) million in 2009 and $11 (£7.04) million in 2011 – each time, in a February.

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Friday morning, as Solazyme makes its debut on the Nasdaq, the company’s co-founders and investors are popping the champagne corks that the IPO was priced on the high end at $18 per share, and the company netted around $198 million. Now investors will clearly be hoping the stock stays at least as high as $18, and goes higher, between now and the 180-day lock-up period, which is the next time investors can get their money out. Wolfson and Dillon were able to offer 300,000 shares each in the offering, and at $18, that gives them $5.4 million each off the bat.

So who stands to gain and how much?

The Roda Group. Investment group The Roda Group, led by Roger Strauch and Dan Miller, owned 29.4 percent, or 13.93 million of Solazyme’s shares before the offering. At $18 per share, that’s worth $250.74 million. The Roda Group invested in Solazyme back in 2004 and led its Series A and B rounds, co-led the Series C round, and participated in the Series D round. The Roda Group also says Richard Branson invested in Solazyme’s Series D round through them.

The Co-Founders, Harrison Dillon and Jonathan Wolfson. Dillon and Wolfson managed to each keep 9.3 percent and 9.2 percent of the company, respectively, before the offering. They both sold 300,000 shares each in the offering, and retained 7.2 percent (4.16 million shares) and 7.0 percent (4.08 million) each. At $18 per share, Dillon’s shares are worth $74.95 million and Wolfson’s shares are worth $73.41 million.

Braemar Energy Ventures. Energy investors Braemar Energy Ventures owned 10.6 percent (or 5.02 million) of Solazyme’s shares before the offering, and it looks like they also owned another 5.4 percent (or 2.54 million shares) through “Solazyme Investments LLC.” (Not sure on this, so will update this if I know more). Those 5.02 million shares at $18 per share are worth $90.36 million. The 2.54 million shares are worth $45.72 million.

Lightspeed Venture Partners. Lightspeed owned 6 percent of Solazyme’s shares (or 2.82 million) before the offering, which is worth $50.76 million.

The Fiddler Group. The Fiddler Group owned 7.7 percent (or 3.65 million shares) of Solazyme’s shares before the offering, which is worth $65.66 million.

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Most standard laptop batteries start losing their ability to fully charge (providing fewer and fewer hours of battery life) after about a year and a half. Anyone who’s a laptop user knows how annoying it is to have a battery that suddenly won’t hold a charge for very long, even though it’s still early in the life of the laptop itself. Leyden Energy says its battery has one of the highest energy densities and run times for a lithium-ion laptop battery on the market, with 440 watt hours per liter and over 1,000 cycles, and the battery can operate at higher temperatures than traditional batteries.

Leyden Energy’s three-year warranty battery will cost a premium over a standard one-year battery, and while Leyden Energy hasn’t yet determined the exact price it will sell the battery for, Leyden Energy CEO and President Aakar Patel told me in an interview that a three-year battery will be less than double the cost of a one-year battery. Leyden Energy will also announce a deal Monday to sell its battery through the Canadian battery retailer Dr. Battery, and interested customers will be able to buy the battery online in a couple of weeks through the retailer.

Leyden Energy was founded in 2007 with a patent acquired from chemical giant Dupont, and a $4.5 million investment from investors at Walden International, Lightspeed Venture Partners and Sigma Partners. Leyden’s secret sauce is an innovation for the electrolyte part of the battery. A battery has a positive and a negative plate and then an electrolyte in between, which is the substance through which electrons transfer back and forth while the battery charges and discharges.

While standard lithium-ion batteries use a salt-based solvent within the electrolyte that starts degrading at a temperature of between 70 to 80 degrees Celsius, Leyden uses a salt-solvent in its electrolyte that doesn’t degrade up to temperatures of 300 degrees Celsius. Leyden Energy holds a patent for this innovation. As Patel explained it to me, when a battery charges and discharges, think of the electrons as rods that move across the electrolyte (between the anode and the cathode) and fill holes on the other side. After a certain point in time, standard electrolytes, particularly at high temperatures, let the rods start to break down and the holes start to fill up, but Leyden’s battery can maintain the integrity of those rods and holes at higher temperatures for a longer period of time.

In the grand scheme of innovations, and with startups trying to change the game with designs for battery-powered cars with hundreds of miles of range, Leyden’s innovation is kind of like baby steps. But if Leyden can manage to get a deal with a major laptop manufacturer to embed the battery directly in a laptop, or market the battery with a popular laptop, then the company could do well. In 2008, Boston Power launched its three-year-lasting lithium-ion battery with laptop maker HP, and is backed by Oak Investment Partners, Venrock, GGV Capital and Gabriel Venture Partners.

Like Boston Power, Leyden Energy has been eying the electric vehicle battery market, too, and is working with Brammo to supply the battery for its electric motorcycle the Empulse, a more powerful version of Brammo’s original e-scooter the Enertia (which I test drove here). Leyden and a vehicle maker partner were also awarded a $2.96 million grant from the California Energy Commission to produce ten electric vehicle batteries per month. Leyden seems like it’s focusing more on batteries for the laptop and consumer electronics markets, instead of electric vehicles, as it seems like the market for electric vehicles is moving slower than some have expected (see A123 Systems , and Ener1 ).

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With no moving parts to speak of, a solid-state drive is far and away more energy efficient than its disk-based counterpart, the hard drive. Generally speaking, it also delivers better performance, resulting in a combination that’s proving increasingly attractive to data center operators. That edge helps IT shops overlook storage capacities that fall short of hard drives and helps justify the lofty price tags attached to SSD-based storage systems. It’s also an edge that’s attracting VC investment.

The latest news comes from XtremIO. This week the company announced that it had scored a Series A funding of an undisclosed amount from two Israeli venture firms, Giza and JVP. Heading up this early-stage storage player is CEO Rokach Ehud, with over a decade of experience in the telecommunications industry, including a stint as the CEO of Corrigent Systems, a carrier Ethernet switching provider. Details are scarce (the companies web site says it’s in stealth), but the company’s announcement makes clear that XtremIO has enterprise IT ambitions for its storage systems.

XtremIO is just the latest in what’s been a string of SSD-related funding activity. Also this week, Cupertino, Calif.-based SandForce, a maker of SSD control chips that boost SSD performance, scored $21 million in funding from TransLink Capital, UMC Capital, Darwin Ventures and others. Founded in 2006, SandForce is banking on SSD controllers that can coax 30,000 IOPS (which stands for input, output operations per second, and is a benchmark for storage — 30,000 is high) out of NAND flash memory and can reach both read and write speeds of 250 MB per second. Typically with SSDs, data is fetched (read) faster than it can be stored (write).

And earlier this month, Santa Clara, Calif.-based Link_A_Media Devices (yes, underscores and all), a system-on-a-chip producer for storage devices, secured $18 million in Series C funding led by Lightspeed Venture Partners. Chris Schaepe, managing director of Lightspeed, singled out one of the technologies that makes the company an attractive investment, specifically “error correction technologies which can now be applied to flash memory.”

Last month SSD chip and drive maker Samsung poured millions into Fusion-io, a company that’s no stranger to soaking up funds despite operating in one of the tightest VC environments in recent history. Prior to Samsung’s investment, Fusion-io cashed a $47.5 million check from Lightspeed and Dell Ventures, among others. Fusion-io manufactures PCI Express-based storage modules that slot into standard servers. The company counts MySpace and Wine.com among its high-profile customers.

If you’ve noticed Lightspeed pop up more than once in these SSD fundings, there’s a reason. The VC firm seems to be making a concerted effort to back SSD startups. Apart from Fusion-io and Link_A_Media, Lightspeed also backs Pilant Technology, a maker of enterprise-grade SSDs, and Unity Semiconductor, a startup working on high-density flash memory storage chips.

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While having a big oil backer is a good sign for a young startup, LS9′s round was markedly smaller than the $65 million the company was seeking back in February and well below the $75-$100 million it had hoped to raise last October.

The smaller round could indicate sluggish investor interest in biofuels other than algae-based fuels. After more than a year of slim venture capital funding for biofuels — as feedstock costs rose, biofuel prices fell and critics raised questions about biofuels’ green cred — we saw a bump in deals this summer, although mostly for algae-based startups, such as Synthetic Genomics, Solix Biofuels and Solazyme. At least one exception has been LS9 competitor Amyris Biotechnologies, which in August raised $24.7 million of what it hopes will be a $62 million round.

The smaller round also could suggest a strategy change that might require less cash. Aside from fuel, LS9 in May announced it is developing technology to make sustainable chemicals in a partnership with Proctor & Gamble.

LS9 started up a 1,000-liter pilot plant in South San Francisco last year and is building a 2.5-million-gallon demonstration plant expected to be completed next year. Aside from CTTV, LS9 also got renewed backing from its existing investors, Flagship Ventures, Khosla Ventures and Lightspeed Venture Partners.

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