vc

Over the past year, the open-source business community has collectively donned a hair shirt over stumbles in venture funding, especially when venture funding in open-source companies took an apparent 12 percent slide in the third quarter of 2008.

However, while the second half of 2008 saw declines in open source-related venture funding, overall, funding levels were 35.5 percent higher than in 2007, according to The 451 Group.

This is pretty amazing, when you consider that overall U.S. venture capital investments plummeted 8 percent over 2007 funding levels, as TechCrunch reports.

And if you treat Washington state as a … Read more

In a not-so-surprising turn of events, The New York Times reports that Silicon Valley venture capitalists actually care about revenue again.

After years of investing in Web 2.0 companies that generate eyeballs and weird brands but little revenue, VCs have decided that businesses that actually make money are a priority:

For Web sites that do not already have large audiences, "your business model may be just as plausible as it was 18 months ago, but we're all more cautious about giving you a slug of money," [Accel partner Theresia Gouw Ranzetta] said.

Instead, investors are looking … Read more

Finjan, which sells Web gateway security software to the corporate market, announced Wednesday a $22 million investment round.

HarbourVest Partners led the round, which also includes Benchmark Capital, Israel Seed Partners, Benhamou Global Ventures, and Cisco Systems.

San Jose, Calif.-based Finjan said it plans to expand its sales and marketing infrastructure with the money.

Tesla Motors on Sunday said it has finalized $40 million in convertible debt financing, which it will use to accelerate production of its Roadster electric sports car.

The company last week said it was seeking money to overcome a low-cash position of $9 million. Elon Musk, its chairman, CEO, and product architect, also indicated that Tesla had tried, but failed, to raise $100 million.

"Forty million is significantly more than we need, Musk said in a statement. "However, the board, investors, and I felt it was important to have significant cash reserves."

Tesla has shipped about 50 … Read more

Trusteer, a provider of Web security services, has raised $6 million in Series B venture capital funding, the company announced on Wednesday.

The round was led by U.S. Venture Partners. Steve Krausz, general partner for the VC firm, is joining Trusteer's board of directors.

The timing might seem odd for funding a company that serves the financial industry given the economic downturn propelled by the credit crisis. But Krausz said the market opportunity is significant for Trusteer's software, which protects online banking, brokerage, health care and retail applications from fraud, even when a user's computer is … Read more

An executive from social-music site Imeem told CNET News just days ago that the company would not be going through a round of layoffs.

Well, not quite.

Imeem's vice president of marketing, Matt Graves, said the question was actually "whether we had done layoffs, not whether we were going to," and that he answered accordingly. Sneaky! He proceeded to confirm a report from PaidContent that a quarter of the company has been laid off.

"There's not as much money floating around the market, and we had to cut our costs to accommodate," Graves said. … Read more

Ron Conway, an investor in more than 100 contemporary tech start-ups and about that many in the last tech boom, sees the current financial environment as very similar to the 2000-2001 tech economy meltdown. His advice, as he laid it out to me earlier today and to his portfolio companies yesterday in an e-mail (after the jump), is the same as it was then: "Raise money internally by reducing cost."

He says, "The funding climate is going to tighten no matter what we do. The sooner we can prepare for it, the better."

At least, he says, entrepreneurs are more mature and proactive than they were in the last downturn. They're coming to him, some with cutback plans and some just seeking advice. As he puts it, the ones who come to him and say, "Walk me through the steps I should be taking," are the ones that will weather the storm.

Conway still feels it's a great time to start a company: if you're a "great entrepreneur with a great business idea," he says, "now is as good a time as any." But "hold on to your day job while you are raising money." … Read more

The opening party of Boston-based Northbridge Venture Partners' West Coast office in San Mateo, CA could not have come at a more awkward time. With the U.S. stock market sinking fast and rumors of venture capitalists being unable to access funds committed to them, I did not expect the shindig to be a happy affair.

But it was, on the surface at least, with free-flowing wine and sushi, and a crowded new office filled with hopeful entrepreneurs and curious VCs. The giant flat-screen in the conference room was tuned to the Red Sox game, not CNN.

Were the players … Read more

Zynga, which specializes in games for social-networking sites, has received $29 million in a new funding round led by Kleiner Perkins Caufield & Byers and Institutional Venture Partners.

The round, announced Wednesday, also includes funding from previous investors Union Square Ventures, Foundry Group, and Avalon Ventures.

Zynga, based in San Francisco and started by Tribe.net social-network founder Mark Pincus, added that Bing Gordon, a Kleiner Perkins partner and former chief creative officer of Electronic Arts, is joining Zynga's board. Zynga also announced its acquisition of YoVille, which it describes as the "largest virtual world game on social … Read more