There was a flurry of news from several of my portfolio companies the last few days. For those of you that track what I’m up to, here it is: Xaffire closed a $3m financing. The company had a great Q404 – landing several significant customers and building real momentum with a couple of key partners. Wendy Lea – an experienced entrepreneur, sales and marketing consultant, and ex-Siebel exec joined the board. ePartners has begun reselling LiveVault’s Online Backup and Recovery Service. The ePartners customer base is one of the largest collection of mid and upper market customers of Microsoft Business Solution products (they added over 300 new customers last year.) As one would expect, they’re systematically expanding their services with third party products that enhance the range of services to their customers – in this case augmenting their existing Business Continuity / Disaster Recovery offering as well as fulfilling record retention and regulatory requirements mandated by Sarbanes-Oxley. Stratify released v5.0 of their Stratify Legal Discovery product. In addition to a range of new features, they’ve added visual email analytics capability, which enables litigators to identify critical relationships in email message flows as part of their legal discovery process. Rally announced the availability of Release 4 of their on-demand software development management solution for Agile teams. One of the cool things about making (and using) an Agile product is rapid release cycles – Release 3 came out on August 16th – not a bad rev cycle for an early stage company. StillSecure Border Guard was awarded “Best Buy of 2004” by SC Magazine: They won top rating in the IDS/IPS (Intrusion Detection / Prevention) category. It just turned Wednesday – not a bad start to the month.

I fly United – well – a LOT (yeah – I’m a 100K Premium Exec again this year) since I live in Colorado and United has something like 75% of the gates at DIA. Like most United frequent flyers, I am somewhat skitzo about my “support” for United – if they get out of bankruptcy, I don’t expect them to operate any better than they traditionally have, but if they liquidate, I expect that my travel will be totally fucked for some period of time since DIA is such an economically unattractive hub for the airlines.

My friend Ron Schmelzer – the CEO of Zapthink and co-founder of Channelwave – pointed out an upcoming MIT Enterprise Forum (Cambridge, MA) conference called “Rated R for Revenue: Selling and Marketing Your Next Great Thing.” The conference is on Saturday February 12th at the Newton Marriott and looks super. My frat brother Colin Angle (iRobot CEO) and his iRobot co-founder Helen Greiner are the morning keynote speakers and the day is finished off by Reid Hoffman, the CEO of LinkedIn. The agenda looks great and is full of strong entrepreneurs and – ahem – a few venture guys.

Tom Bartel – a long time colleague going back to the early days of Email Publishing in the mid-1990s and a hardcore privacy advocate currently working at Return Path – mentioned a powerpoint presentation by Simson Garfinkel titled Remembrance of Data Passed: Used Disk Drives and Computer Forensics. While I don’t know Simson, we were both in the same year at MIT (87) and I remember him as the guy that always had articles and photos in a variety of MIT-related publications and I’m reminded of it every time I see an article by him in Technology Review.

ProSavvy – a company I’ve been on the board of since 1996 – announced this week that they have merged with eWork. The combined company (called eWork) is the leader in consulting project and contracted workforce services procurement, management, and payment and is a $42 million, profitable company. We continue to be significant investors in ProSavvy and Seth Levine – who works with me at Mobius in Colorado – has joined the eWork board.

I had a great board meeting today at Quova and a near perfect board meeting at Rally last week. While it’s a pleasure to be involved in both companies since they are both performing very well, the structure and tempo of each board meeting really turned me on. I had started to notice a disconcerting rhythm to some of my board meetings. On the positive side, several of my CEOs have done a spectacular job of putting together comprehensive board packages that we’ve replicated throughout much of our portfolio. As a result, we have substantial, detailed board packages that come out around a week prior to the board meeting. This gives me plenty of time to read through the board package, ask specific questions of the CEO in advance of the board meeting, and study the financials carefully. Since most of my companies are working off the same board package template, the information is predictably organized, easy to follow, and comprehensive.

Fortunately for my wife Amy, she’s aware that I’m a 15 year old boy trapped in a 39 year old’s body. So – when Netflix delivers Caddyshack to us, she let me watch it on a Friday night after I’ve worked much too hard, exercised too much (and still struggled to get all the weight off), and been entirely too serious for the past five days (ok – as serious as I get about anything – which isn’t that serious since I am really a 15 year old after all.)

We had a good day yesterday at Mobius VC as MCI announced they were acquiring NetSec for approximately $105m. My partner Rex Golding has been involved since NetSec’s first venture round in mid 2000. As this investment was done at the peak of the bubble, we – like many other venture firms – were investing heavily in the promise of companies that provided “managed services” and were labelled “managed service providers (MSPs).” In many cases, post-bubble, the outcome of these companies was disappointing. NetSec – which specializes in managed security services (being one of the notable “MSSP’s”), built a very strong government practice, and has a deep, experienced leadership team. Things were challenging for the company in the 2001 – 2002 time frame, but everyone was patient, the team continued to systematically build a solid business, and has seen phenomenal growth the past 24 months. 

As Jason and I continue to work our way through a typical venture capital term sheet, we encounter another key control term – the “protective provisions.” Protective provisions are effectively veto rights that investors have on certain actions by the company. Not surprisingly, these provisions protect the VC (unfortunately, not from himself.) The protective provisions are often hotly negotiated. Entrepreneurs would like to see few or no protective provisions in their documents. VCs – in contrast – would like to have some veto-level control over a subset of actions the company could take, especially when it impacts the VC’s economic position.