Over the past few years, the San Jose, Calif.-based life sciences venture capital firm has co-invested with accredited individual investors on a handful of deals.  On Friday, the firm went one big step further with the launch of VentureHealth, an equity crowdfunding site for biomedical technology companies.

As report after report has shown, venture capital funding for life sciences companies has been on the decline. This week, for example, PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA) revealed that venture funding in the life sciences sector dropped 14 percent in the first quarter of this year.

VentureHealth wants to give health startups — both early, but particularly later stage — a new option for raising funding, while embracing a model that enables doctors, health care professionals and others with sufficient means to support companies addressing issues they care about.

“The life sciences venture industry has been shrinking – there’s less capital available for really exciting companies,” said InCube managing director and VentureHealth co-founder Andrew Farquharson. “To the extent that we can mobilize capital into companies that need it, we’re meeting our mission.”

VentureHealth isn’t the first attempt at bringing crowdfunding to health care. MedStartr and Health Tech Hatch offer entrepreneurs a platform for raising relatively small amounts of seed capital without giving up equity. And last week HeathFundr launched an equity crowdfunding site targeting medical device and other health entrepreneurs looking for Series A-range funding.

But unlike HealthFundr, CircleUp and other equity crowdfunding sites that have recently emerged, VentureHealth doesn’t offer securities through a registered broker dealer. Instead of taking a commission on each transaction, it’s compensated through a combination of fees and carried interest, which is a percentage of the profits earned by investors when a company is sold or experiences another kind of liquidity event. While the amount can vary, the company said it will tend to be about 20 percent.

That’s a decent-sized payout, but Farquharson said its model means that VentureHealth only wins when its investors win so it’s extra incentivized to find the best deals.

Over the past decade or so, Farquharson and his co-founder Mir Imran, a medical inventor who holds more than 200 patents, have invested in a range of companies, from BodyMedia, a wearable technology company recently sold to Jawbone to epilepsy treatment company Neurolink. Given their track record and experience, he believes VentureHealth could give interested investors a well-curated selection of deals and entrepreneurs the extra support they may need.

For now, Farquharson said, they interact with every accredited investor on the site but, when it’s implemented, the JOBS Act will enable VentureHealth to reach a broader pool of investors and expand its options.

The site currently has no active deals listed, but Farquharson estimates that it could offer five or six deals over the next 10 months. Once VentureHealth scales sufficiently, InCube plans so spin it off as a standalone company.

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Rich Miner, partner, Google Ventures (c) 2012 Pinar Ozger pinar@pinarozger.com

The rise of Google’s venture capital arm is an interesting one, because unlike a lot of emerging VC firms, Google Ventures isn’t lacking in capital. Instead, the firm has to prove that it’s not just an offshoot of Google, but rather a VC firm in its own right that can compete with other top-tier firms for access to the best — and potentially most profitable — founders.

“We are not your typical strategic corporate fund,” the firm’s enterprise partner Karim Faris told Forbes, in a mantra you hear often from the group.

One way Google Ventures is working to attract young founders is the addition of young, visible partners like former Digg founder Kevin Rose and blogger-turned-VC MG Siegler. While it boasts Android founder Rich Miner as a partner, Miner is based in Boston, and the addition of Rose and Siegler can help Google Ventures build up its local presence and visibility. So far, Google Ventures has invested in a large number of companies including Nest, DocuSign, HomeAway, and Nextdoor.

Digg founder Kevin Rose, now a Google Ventures partner.

One way Google Ventures is trying to distinguish itself from its Valley peers is by preaching a more hands-on approach to investing. Unlike the traditional model, where partners dispense advice to portfolio companies at board meetings or when the companies ask for it, Google Ventures has set up more of a lab-like atmosphere in Mountain View. It has designers, marketers, engineers and other staff on hand to assist and advise the portfolio companies however they need it.

This strategy has worked for firms like Andreessen Horowitz, which also launched around the same time as Google Ventures in 2009 and was originally derided for its flashy, PR-powered operation. But it has quickly become a top-tier firm in a short period of time, investing in companies like Facebook, Instagram, Github, Pinterest, and Twitter.

In November, Google Ventures announced that it now plans to invest $300 million a year, compared to more typical VC firms that invest about $200 million to $500 million over the course of several years. There’s no question that having the resources and support of Google behind the firm has an impact.

“We were lucky. Larry and I, we just wrote up the check,” Google co-founder Sergey Brin told GigaOM in an interview at the time.

When Google Ventures announced plans to increase the size of its fund, managing partner Bill Maris said Page had asked him what he would do with $1 billion. But with the firm already investing in about 80 companies a year and providing resources like engineering, design, and marketing guidance, he worried more about how to scale that kind of operation and provide enough partner attention for the companies that need it. So adding some new partners is a step in that direction.

Building a VC firm that can compete at the highest levels with the likes of Sequoia and Greylock only four years after launch isn’t an easy task, even if the firm had one of the hottest names in technology as partners. But if Google’s forays into driverless cars and Glass are any indication, the company has no problem setting its sights high.

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The numbers bear out the trend. In the first quarter of 2013, VCs dumped nearly $353 million into IT security deals, up 90 percent over that quarter the previous year, according to MoneyTree Report data provided to GigaOM by the National Venture Capital Association. If you divide the total funding by the number of deals, the average amount was more than $16 million, up 125 percent over the $7.1 million amount in the first quarter of 2012.

Security startups that have taken on VC funding rounds this year include Cylance, TraceVector and vArmour Networks, among others.

The intersection of big data and security has been a hot space, as companies move to collect lots of information and analyze it all as fast as possible, just as companies want to derive insights on increasing and more complex data sets that can lead to overhead reductions and new revenue streams. For example, in October, EMC said it would buy Silver Tail Systems, which tracks web and mobile-app traffic and points to unusual behavior and violations that customers can set. To separate the wheat from the chaff of vulnerabilities that multiple security systems might discover and to use security staffers efficiently, Risk I/O prioritizes issues. Last year it got $5.25 million.

Are the cyberattacks nudging VCs to shell out millions? Shirish Sathaye, a general partner at Khosla Ventures, which has invested in Cylance and TraceVector along with Lookout and DB Networks, thinks the cyberattack news onslaught is making a difference.

“The first reason is, yes, every time you open a newspaper, you read about somebody being attacked,” he said, whether against consumers or companies. The likelihood and complexity of attacks only become greater as more people get online, often with multiple devices.

The multiplicity of devices accessing a network — a trend in its own right — could pose security challenges on its own, and Tenable Network Security picked up $50 million last year following the addition of features that look for vulnerabilities popping up as mobile devices and provide information on devices such as whether they are jailbroken. Last month Ionic Security, which keeps data encrypted as it moves to devices, said it had raised $9.4 million in new funding.

Another reason for the security funding boom, Sathaye said, is the success of network security player Palo Alto Networks. Prior to its public offering last year, threats might well have helped its appeal.

From Sathaye’s point of view, it’s critical to nurture the ecosystem of options for strengthening network and endpoint security. “As bad guys keep innovating, good guys have to innovate at least as fast as them, if not faster,” he said. With more money going toward IT-security startups, it does seem that plenty of other VCs think there’s an opportunity here.

Feature image courtesy of Shutterstock user LeventeGyori.

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The venture firm welcomed Solomon in a statement and explained what he would add:

“As Venture Partner, Rob will be evaluating early stage and growth equity opportunities with Accel. He will also play a major role in advising the firm’s portfolio companies on a wide range of strategic and operational issues like product management, scaling infrastructure, business operations, and mergers and acquisitions.”

Accel manages over $9.6 billion in funds and has had some strong successes investing in internet companies like Dropbox, Etsy, Facebook, Kayak, Prezi, Rovio, Trulia, and Vox Media.

Before his tenure at Groupon which ended in July 2012, Solomon worked at the venture firm Technology Crossover Ventures and was the president and CEO of a startup called Sidestep that was acquired by Kayak.

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Troy Henikoff, the program’s managing director, said the 10 startups were selected from an applicant pool of 904, which was double the size of the applicant pool last year. The 10 companies not only reflect a range of industries, he said, the new cohort is geographically diverse, with just three startups from Chicago and a couple from outside the U.S.

Launched three years ago, Excelerate Labs was led by a group of entrepreneurs and venture capitalists, including Henikoff (founder of SurePayroll), OkCupid founder Sam Yagan, Sandbox Industries’ Nick Rosa and New World Ventures’ Adam Koopersmith. Its 30 companies have raised a total of $30 million, the group said. But teaming up with TechStars elevates the program and gives startups access to a national network of mentors and investors.

Here are the program’s 10 new startups:

CaptureProof – Currently in beta, CaptureProof gives patients a secure site for tracking their health with photos and video and then sharing them with their doctors. Through the site, doctors can monitor patients’ health trends and progress remotely.

HIPOM – For parents who want to limit their kids’ access to the internet, HIPOM provides a cloud-based solution for controlling any individual device in the home.

Nexercise - Nexercise is an iPhone and Android app that helps people lose weight and improve their fitness through competitions with friends, alerts and rewards.

Pathful – A web analytics service, Pathful says it tracks all kinds of visitor interactions and doesn’t require tagging.

Peoplematics – Peoplematics is a service that enables employees to find and share information across their personal cloud.

Project Fixup – A matchmaking service, Project Fixup pairs up people for one-on-one dates based on their schedules and interests.

SimpleRelevance – An email marketing platform, SimpleRelevance says its analytics-driven approach can improve revenue per message by 30-300 percent.

SocialCrunch – SocialCrunch says it builds a “behavior graph” of internet users to help marketers learn about and reach a target audience.

Sqord – A “Fitbit for kids” (see disclosure), Sqord’s watch-like fitness tracking device promotes activity through friendly competition.

TradingView – An online community of investors and traders, TradingView aggregates web stock charts and enables investors to share their ideas.

Disclosure: Fitbit is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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Considering that before these new additions Tadem had a roster of only three partners, that’s significant growth. Tandem typically accepts into its accelerator program three or four early-stage startups each quarter, making a $200,000 investment in each, as well as providing office space and mentoring.

With its newly bulked up team, though, Tandem plans to host and invest in a larger number of companies each year and expand its scope to more countries – while still maintaining its focus on mobile. Last year, Tandem closed its second fund, raising $32 million.

Tandem on Friday also revealed the three companies that make up its latest accelerator class:

• Tile: Tandem’s first mobile hardware investment, Tile has developed a small mobile tracking device that can be attached to any personal or important item, even pets.
• Swoopt: Currently in beta, Swoopt has developed fantasy sports gaming and tournament software for the mobile phone.
• HomeTapper: This startup is developing a rich-media experience for real-estate listings on the tablet.

Tandem is accepting applications for its summer class until May 1.

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There was Shirish Sathaye, a general partner at Khosla Ventures, calling out at this year’s Open Networking Summit on Tuesday for more software-defined networking startups for him and others to fund. His firm saw the promise of Big Switch Networks a couple of years ago. It seems the hunger for SDN companies to back has not fallen away. It’s not particularly surprising in this golden age of enterprise IT, in which VCs are hunting for enterprise plays following the rise of SDN and other disruptions.

While the other side of the coin is that production-scale use cases from enterprises are still hard to find, managed-hosting service providers have been quicker to try out the benefits of SDN. After all, those companies can improve their bottom lines by rolling out new services and potentially lowering capital and operational expenditures. But the enterprises have looked more hesitant to dive in and see what’s possible.

That level of market penetration — where large data centers and Wall Street banks give SDN a shot — could happen in 2014 or 2015, said Paul Santinelli, a partner at North Bridge Venture Partners who has backed Embrane.

Rather than present software that can impress network administrators, the key for investors is whether SDN startups can solve real business problems, said Alex Benik, a principal at Battery Ventures. “I think it’s kind of incumbent on the community to work together to not overpromise and underliver on what SDN can deliver on a reasonable time scale,” Benik said. That delivery, he said, is not coming right away, but more like the end of this year and throughout 2014. With SDN code on the way from the OpenDaylight Project, founders that have been working on open controllers and other components in stealth mode could now be pivoting, so VCs might have to wait a while for the most promising SDN solutions.

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BusinessWeek broke the news of the Series D funding round early on Thursday, an article that was quickly followed by a post from founder Dennis Crowley on the official Foursquare blog — entitled “Continuing Foursquare’s Growth” — and posts from two separate partners at one of the company’s main financial backers, New York-based Union Square Ventures.

Crowley compares the challenges to Google

In his post, Foursquare founder and CEO Crowley describes the challenges ahead — including some fairly dramatic technical challenges, such as the need to index and filter more than 3.5 billion check-ins and other location data in something approaching real time, in order to successfully recommend to users a restaurant or other business that fits their needs. Crowley compares it to the kind of data wrangling that Google has to do in order to provide search results:

“To us, this is like when Google came and revolutionized web search. Suddenly, you could find things on the internet. The real world is the same way. Four years ago when we started Foursquare, it was really hard to discover a new retro arcade that opened up on a side street, or to make sure you weren’t overlooking the best dish on the menu, or to know a good friend was just around the corner. Sometimes, we think of Foursquare as having the ability to give people superpowers for exploring the real world.”

In a post at the Union Square Ventures blog, Albert Wenger talked about the potential for Foursquare to capitalize on its new focus as a platform for discovering local businesses — something GigaOM’s Eliza Kern highlighted in her post on the newly redesigned Foursquare app, which launched on Wednesday. In effect, the company is going head-to-head with local recommendation services like Yelp, and giving up its earlier focus on “gamification” elements like mayorships and badges.

Debt instead of a lower valuation

Union Square Ventures partner Fred Wilson, meanwhile, wrote a post on his own blog about the fact that Foursquare chose to (or was forced to) use convertible debt rather than equity. As Wilson explains, this kind of late-stage debt issue is often used when a company doesn’t want to (or can’t) raise equity because doing so would involve a “down round” — in other words, raising money at a lower valuation than it was given in earlier rounds. As he described it:

“Both of our firms have been investors in Foursquare for several rounds and both of us own a meaningful stake in the company. Valuation is somewhat immaterial to us as our stake in the company is not going to increase much in this round of financing. But valuation is very material to the Foursquare management team because $41mm of capital is going to be dilutive at any valuation that would make sense here.”

As Foursquare has evolved from being a fresh young startup with the hot iPhone app — which it was in 2009, when it launched at the SxSW festival — into a four-year-old company that has raised a total of $70 million in three separate rounds, it has faced increasing pressure to prove that it has a real business, along with questions about whether it can ever justify its earlier valuation, which was in the $600 million range. In a report in January, private-company research firm PrivCo argued that Foursquare could go out of business by the end of the year unless it raised more money.

In a much-publicized spat on Twitter last month, investor Keith Rabois — a former PayPal founder who is a backer of Foursquare competitor Yelp — said Foursquare’s only option was to be acquired, because it had failed to back up its valuation with any real business success.

@dens @sriramk @hunterwalk great use of jargon. Maybe Hail Mary Bebo-style acquisition will bail you out.—
Keith Rabois (@rabois) March 16, 2013

Foursquare needs to prove it is a business

Foursquare’s biggest problem is that it hasn’t been able to generate any meaningful revenue from the millions of users and partnerships it has announced over the past couple of years — according to an anonymous source quoted in the BusinessWeek article, the company had revenue last year of just $2 million, which makes a $600-million valuation look almost ridiculous. According to Crowley, much of the new financing will be used to develop advertising products that can run next to Foursquare’s local recommendations.

Despite its inability to produce revenue, the company’s supporters remain optimistic about its chances of building a truly large-scale and profitable local recommendation service. Hunter Walk, a former YouTube staffer turned venture capitalist, said on Twitter “All I know is the financing allows them to continue building a product I love,” and Shai Goldman of the 500Startups angel fund said: “I hope they figure out how to monetize, I’m a fan.” Even John Lilly of Greylock Partners, which didn’t invest in the company, said on his blog that he thinks Foursquare has a chance to build a real business:

“What does matter is that they raised the money they need to give this a real go. I have high confidence in these guys that they’ll do well and build interesting products and a great business for a long time.”

Others, however, were less complimentary — and many seem to see Foursquare as a high-risk bet, much like email-offer flameout Groupon:

.@mdudas @jackgavigan @rabois @bijan I can only hope foursquare goes public. I didn't short Groupon nearly big enough.—
Rakesh Agrawal (@rakeshlobster) April 11, 2013

Post and thumbnail photo courtesy of Pinar Ozger

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Envelope tracking might sound like a certified mail service, but it’s really a technology used to tame LTE’s normally power hungry ways. LTE is unique among cellular technologies in that its power levels rise and dip dramatically throughout the course of a transmission – think of an LTE signal like the wild crescendos and quiet interludes of classical music.

Envelope tracking closely matches the power fed into the radio with the power needed at given moment to transmit. The result is a highly efficient power supply that can reduce a phone’s power drain by as much as 25 percent over current 4G devices. Given the miserable battery life of first generation of LTE phones, a 25 percent improvement is nothing to scoff at, and once combined with other power-saving technologies such as integrated handset silicon as well as improved batteries, we’ll see phones that can go much longer between charges.

Quantance’s latest $12 million round is its Series D with all of its existing investors — TD Fund, Granite Ventures, InterWest Partners and DoCoMo Capital – chipping in. Quantance raised $30 million in its previous rounds, going all the way back to 2006, the last of which was an $11 million investment in 2011.

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Overall, health technology startups received $120 million from investors in March, a 12 percent increase from the same period last year. Deal volume nearly tripled, from 13 deals last March to 36 this year.

Here’s an at-a-glance look at activity last month:

• Although practice management was the dominant sector by funding amount last month (largely because of One Medical Group’s Series F round), sensor technology was a bigger winner in terms of deal volume.  In addition to the nearly $12 million raised by health-tracking wristwatch startup Basis, companies including Rock Health-backed Podimetrics, which makes an intelligent floor mat for helping diabetic patients detect foot ulcers, and Sensiotec, which develops technology that monitors heart and respiration rates without any direct patient contact, added new funding.
• Personalized medicine got a boost last month. Five startups – from those that speed up the analysis of DNA sequence data to those that give chronic disease patients in-depth reports and analysis on their personal condition – raised funding, including Spiral Genetics, Bina Technologies and MetaMed.
• Last month, Nike announced the 10 companies participating in the first class of its TechStars-powered accelerator for fitness-related startups. This points to a growing trend of strategic investors attempting to drive innovation around specific themes. Earlier this year, GE announced a partnership with Startup Health to invest in consumer health startups. “I think we’re going to start to see strategic partners do more of these types of programs in the future,” said Unity Stoakes, president of Startup Health.

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