A venture capital firm is comparable to the human backbone for startups – they need it in order to stand up.   It’s quite rare for startups to thrive without a good VC firm’s support.  But like any company, VCs also need to shake things up to remain competitive and keep the trust and confidence of their clients.  So let’s take a look at some of the recent happenings in the VS sector.

New partner for Greylock

Greylock Partners, one of the oldest VC firms in the US, named Dev Ittycheria, former CEO of BladeLogic and former president at BMC, as the firm’s latest venture partner.  Ittycheria will be focusing on enterprise and cloud-related investments.

“The enterprise is back,”  Ittycheria said.  “For the last few years, all the noise has been on the consumer side. I believe that a lot of new disruptive technologies are innovating how large organizations procure and manage their IT infrastructure.”

The new partner has a background in the cloud since he used to run a cloud services company called Applica, even before the “cloud” became the buzz word it is today.  Ittycheria is also a board member at Bazaarvoice, AthenaHealthy and AppDynamics, all early investments for Greylock.

Greylock is known their investments in Facebook, and Instagram – which we all know are both successful.  They just participated in a $64 million round for Just-Eat, one of the world’s largest online takeaway ordering services, which was led by Vitruvian Partners, a European private equity firm.  Last week, Greylock also participated in a $5.1 million Series A funding round with GGV Capital for Citrus Lane, a subscription e-commerce site focused on getting useful, developmentally-appropriate and delightful products to young families.

LightSquared loses director to save 4G plan

Philip Falcone, founder of VC firm Harbinger Capital Management LLC, launched LightSquared to develop a wholesale 4G LTE wireless broadband communications network integrated with satellite coverage across the United States using a block of frequencies located near the band used by the Global Positioning System(GPS).  Unfortunately, the Federal Communications Commission stated that tests showed LightSquared’s offering were proven to interfere with existing GPS devices.

Now LightSquared is faced with the expiration of a debt-terms violations waiver today.  In order to get a one week extension from lenders, Falcone decided to step down.  If this is approved, Falcone and LightSquared’s lenders plan to continue negotiations for a longer extension of somewhere between 18 months and two years, which will keep the company from filing for bankruptcy.

“I’ve only been on the board for two months and it was always supposed to be temporary,” Falcone wrote in an email. “I am not an officer nor did I ever plan to be one.
“The board and the company need telecom and industry veterans, not hedge-funds managers.”

However, some sources stated that a deal might not happen as Falcone may still choose to file for bankruptcy in order to keep control of the company and to keep creditors from taking control.

A report from the Wall Street Journal states that there are two possibilities for LightSquared: 1) “agree to make LightSquared a “bankruptcy-remote” company through provisions that would make it difficult for the wireless communications firm to seek Chapter 11 protection, the people said. Lenders have proposed Mr. Falcone be personally liable if it can be demonstrated that he supported, encouraged or caused a LightSquared bankruptcy at a later date, the people said. That liability—known in restructuring circles as a “bad boy” clause—could result in Mr. Falcone repaying the lenders’ $1.6 billion in debt from his own pocket;” 2) the golden chair option which “would install a director, or directors, on LightSquared’s board who could block any vote authorizing a bankruptcy filing.”

Right now, LightSquared’s lenders have more power over Falcone as they hold enough debt to block any reorganization they are not happy with.