Capital Chaos

 Searchme (Mountain View, CA) pulled in a staggering $31M from Sequoia Capital , Lehman Brothers and DAG Ventures.  This is by far one of the largest investments by Sequoia in search along with Mahalo. 

The video search engine actually goes into private beta today but you can sign up to get an invite.  Unlike other search engines which typically just return text results ala Google and others, Searchme does it in a graphic manner with pictures and videos.  Think of it like the way iTunes displays their selection of videos or albums where you can flip through the selections in a visual manner.

Using predictive technology that tracks the word typed into the search box (e.g., Madonna), Searchme will also suggest categories of content for visitors to browse (e.g., the religious figure or the pop star).

According to Searchme CEO, Randy Adams, “With Searchme, you can thumb through 30 pages of the Web in the time it takes to read one page of Google.”   It’s clear that this latest innovation may reshape the way advertisers look at and value search - and Sequoia partner Mark Kvamme (also Chairman of Searchme) has been pitching that as a concept to the advertising community in NYC this week.  Amazingly, the company only has 35 employees and seems to run a very lean shop especially with the amount of funding they have gotten - although that may all change with the new windfall.

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Sequoia Capital (Menlo Park, CA) is the premier VC firm on the west coast. Boasting investments in some of today’s most widely used sites (24/7, Apple, EA, Google, Yahoo!, Mahalo), there is probably no bigger or better confirmation of your great idea than an investment by Sequoia. The firm is really focused on growth and leveraging its team to help the companies it invests in. They offer three type of financing:
Seed Stage ($100k - $1M)
Early Stage ($1M - $10M)
Growth Stage ($10M - $50M)

The only drawback to the company’s philosophy is that they are really keen on investing in companies that are close to their offices. This makes it very hard for those companies that have great ideas, opportunities and management who live elsewhere. The fundamental rationale here is proximity allows Sequoia the ability to “touch and feel” its investments as opposed to relying on information remotely (Companies like YouTube, Plaxo, Cast Iron and Mark Logic actually worked out of Sequoia’s offices in the early stages to get going and the access to people is invaluable). I do get the reasoning and it has worked for them so hard to knock it.
They are very focused on what they refer to as their “four staples” services, software, systems and components. It’s their sweet spot and again, they have had a lot of success with the formula.

It is important to note that whoever you pitch there make sure you are 100% on your game. Best chances of getting a meeting are to be introduced but don’t think that will get you funded. These guys are here to make money first and friends second. Also, expect them to critique the plan very hard as they have seen a lot and know what works and what doesn’t. If you believe you know more than they do, go to a different firm. If you are open minded to the guidance and hope they dig your plan, stop reading and call anyone you know to get a meeting.

One of the guys who seems to have a lot of respect and gets rave reviews for his professionalism is Roelof Botha .

Contact:
3000 Sand Hill Road
Building 4, Suite 180
Menlo Park, CA 94025
T: 650.854.3927