VC Buzz – $439.15 Million in Today’s Deals

SANTA ROSA, Calif.– Advanced TelCom Group Inc., an integrated communications provider serving mid-sized US markets, signed a definitive agreement with Texas Pacific Group and other private equity investors to invest $175 million in the company. This investment, combined with a prior equity round of $105 million and a $160 million credit facility, brings ATG’s total capitalr

aised since December 1998 to $440 million. TPG will be the largest investor in the new equity round. Other institutional investors include: Norwest Venture Partners, Norwest Equity Partners, JP Morgan Investment Corp., The Centennial Funds, First Union Capital Partners, Alta Communications, Telecom Partners, BCI Partners, Duff, Ackerman & Goodrich, AT&T Ventures, and Union BanCal Equities.

SALT LAKE CITY– STSN, a high-speed Internet technology and service provider for vertical markets, closed a second round of equity funding and has secured debt funding from: APV Technology Partners, BankOne, First Media ST Holdings, Intel Corp., Marriott International, Third Coast Capital, ThomVest, TransAmerica Technology Finance, VantagePoint Venture and Communication Partners, and Venture Frogs Fund. The additional $55 million will provide STSN with the resources necessary for continued growth, market expansion, and an aggressive installation schedule. APV Technology Partners and several key private investors provided the first round of funding for STSN.

MARINA DEL REY, Calif.– Guidance Solutions Inc., an online business developer and e-business incubator focused on transitioning traditional businesses and existing brands into world-class online businesses, announced that two private investment firms have made an investment of $46.6 million in its securities. The investment includes approximately $35 million from a fund sponsored by Clayton, Dubilier & Rice Inc. and $11.6 million from BCI Partners. Both investing companies will receive representation on the board.

WOODLAND HILLS, Calif.– eNutrition, an Internet resource for nutritional products and information, announced the successful completion of a $20 million round of private financing led by Brentwood Venture Capital, with additional investments from idealab Capital Partners and Entertainment Media Ventures. eNutrition is an online retailer of nutritional supplements, vitamins, minerals, herbs, sports nutrients and other related products. eNutrition mixes commerce with content to provide health-conscious consumers with unbiased information on an array of relevant health topics. Sandy Climan, managing director of EMV, will sit on eNutrition’s board of directors.

SAN FRANCISCO — AudioBase, a provider of streaming audio services for online marketers and music publishers, closed its latest financing round of $20 million. Bay Partners, which provided AudioBase’s original venture financing, was joined in this round Hambrecht & Quist Access Technology Partners; personal investor Charles R. Schwab; Sony Music Entertainment; Texas Pacific Group; and Trans Cosmos USA. Charles R. Schwab will join its board of directors.

In other news, former Turner Broadcasting executive, Andrew Goldman, has joined IBS as executive vice president of sales and business development. Goldman comes to the company after 18 years of Internet and broadcast, sales and marketing experience.

of local service companies, announced a $6.05 million strategic investment from eCompanies Venture Group L.P. This represents an ownership of approximately 15% of ValueStar on a fully-diluted basis. Other participating investors brought the total funding to $9.05 million which included follow-on investments from institutional investors Seacoast Capital Partners, Pacific Mezzanine Fund and Tangent Growth Fund.

SANTA CLARA, Calif.– ishoni Networks, a developer of broadband communication gateway technology, secured $8.5 million of venture funding to build a next generation broadband gateway platform with integrated voice features. Investors include venture capital firms Bessemer Venture Partners, Infinity Capital L.L.C./Information Technology Ventures and Invesco. ishoni Networks is developing a next-generation, highly integrated gateway platform from which any systems vendor can build gateway products that provide easy voice and Internet services over a single broadband connection. Broadband gateways allow end-user customers to combine high speed “always on” Internet access with their voice service and media-rich content over a single connection. In turn, gateways enable service providers to offer new, revenue-generating, bundled services over cable or xDSL to millions of subscribers.

SILVER SPRING, MD — USLaw.com launched an online legal service and completed its first round of financing which was led by Grand Central Holdings and included Broadview Associates. Terms were not disclosed. Users can obtain legal information by conducting a one-on-one live chat with qualified lawyers or use the site to locate lawyers in specific practice areas and geographic locations. In addition, USLaw.com includes a library of over 500 articles

on numerous legal topics ranging from age discrimination to consumer rights to criminal statutes. USLaw.com is the operating name of AmericasLawyer.com Inc., founded as a joint venture between LawCorps Development Company, Venture Consultants, and Dispute Resolutions.

TAMPA, Fla.– Communications Equity Associates International Ltd., an affiliate of Communications Equity Associates LLC, a US-based investment and merchant banking firm specializing in the telecommunications, entertainment and new media industries, announced the acquisition of Regent Technology Limited, the holding company of Regent Associates Ltd. Regent is a mergers and acquisitions advisor for European companies in the Information Technology sector.

CEA is a privately held company specializing in investment banking, merchant banking, corporate finance, strategic consulting and related services for clients in cable, broadcast, telecommunications, entertainment and new media. Regent Associates is a specialist in all aspects of corporate development, including acquisitions, divestments, company sales and mergers, valuations and capital raising for the IT. Regent has completed nearly 250 transactions and has many of the world’s largest IT companies as regular clients. Last year over 70% of Regent’s acquisition deals were cross border. Both companies are moving strongly into the private equity and fund management business. CEA has $492 million under management in six region-specific, private funds, all of which are targeted at the high growth industries of telecommunications, media, and the Internet. CEA is currently developing additional funds in excess of $1 billion.

PALO ALTO, Calif.– Technology Crossover Ventures announced that it has invested $111.8 million in 12 Internet enterprises during October and November. Since July 1, the venture firm has invested more than $250 million. TCV’s most recent investments include Total Sports, Cameraworld.com, eBags, Great Entertaining, ICON Holding Corp., Mayan Networks Corporation, Noosh, OurHouse, Spree.com, XACCT Technologies Ltd., Evite.com, and Zone Trader.com. These new investments expand TCV’s Internet portfolio to more than 70 companies since the firm’s founding in 1995.

CHICAGO — Mayor Richard M. Daley announced three initiatives that will help Chicago enhance its “unmatched potential” as a technology economy leader in the next century. The initiatives are: a new state-of-the-art incubator campus for Internet businesses proposed by the Chicago-based divine interVentures inc; the city’s first strategic technology action plan, developed by the Mayor’s Council of Technology Advisors; and the Big Shoulders InterTech Fund, one of the largest Chicago-based early-stage seed capital funds. divine is an Internet holding company that provides entrepreneurs and corporate spin-offs with strategic guidance, operational support and business services to create dynamic business-to-business Internet commerce leaders.

SAN JOSE, Calif.– iCastle.com, an Internet home improvement portal, announced that Michael C. Toll has joined the company as president and chief executive officer. Most recently, Toll was president of Sears Home Improvement Services, a $1.1 billion annual revenue division of Sears Home Services. ICastle.com is venture-backed.

EATONTOWN, N.J.– Tachion Networks Inc., creator of the Collapsed Central Office for communications carriers, has added to its core management team, naming Thomas G. Amato as chief financial officer. Amato brings more than thirty years experience at high-profile technology companies including Intel, Rockwell and Dialogic. He will play a major role in leading Tachion to an Initial Public Offering planned for 2000. Tachion Networks received first-round funding from Walden International Investment Group and Morgenthaler Venture Partners.

PALO ALTO, Calif. — Financial Engines Inc. announced the appointment of Raymond J. Sims as the company’s new chief financial officer. Sims joins Financial Engines from Raychem Corp. where he was treasurer and senior vice president. The company is funded by Foundation Capital and New Enterprise Associates.

SAN FRANCISCO — eFrenzy, an online marketplace for buyers and sellers of services, announced that it has added two veteran Internet executives to its management team. Stephen Lake, formerly of iVillage and Reuters NewMedia, joins as CEO bringing more than 20 years of Internet, management and finance experience to eFrenzy. Noah Mercer, former director of strategic technology at nytimes.com, joins as CTO, bringing critical technical expertise to handle rapid growth and heavy consumer use. eFrenzy has received backing from key institutional investors.

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