Early-stage software and IT deals are a scarce breed these days. That’s my initial take from looking at the October funding numbers for Washington state, courtesy of ChubbyBrain, a New York-based information services company that makes tools for investors, startups, and entrepreneurs.

According to ChubbyBrain’s stats, Washington tech, life sciences, and cleantech companies raised a total of $69.75 million last month—down from $84.9 million in September, but still up from $51.4 million in August. There were six venture deals in October, worth a total of $59 million (see below), to go along with three debt financings (a total of $8.35 million) and an unattributed financing round of $2.4 million.

The venture deals were dominated by a $30 million Series A round for Integrated Diagnostics, Lee Hood’s early disease detection startup, and a $22.5 million financing for PopCap Games, the 10-year-old company’s first outside funding round. Looking at the past three months, it’s clear that large early-stage software deals aren’t coming back anytime soon. (You really have to look at the sub-$1 million deals to get an idea of the activity in software and IT, at least in the Northwest.)

In addition to the VC deals, there were three debt financings in the ChubbyBrain stats (and previously reported in Xconomy): Kennewick, WA-based solar developer Infinia raised $3.25 million; Seattle-based lab automation company Teranode raised $900,000; and Kirkland, WA-based health-tracking firm Veratect raised $4.2 million. Lastly, Spring Wireless, a Brazilian company that set up North American headquarters in Seattle early this year, raised an unattributed round of financing worth $2.4 million.

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Dendreon (NASDAQ: DNDN), the Seattle-based developer of a new treatment to stimulate the immune system against prostate cancer, said today in its quarterly financial report that it ended September with $259.6 million in cash and investments. That means it burned through about $28 million in cash during the last three months, based on its previous quarterly report, in which it said it finished the month of June with $287.5 million in the bank. The company is preparing to manufacture and market sipuleucel-T (Provenge) for men with terminal prostate cancer. Dendreon raised $221 million in May to pursue that goal.

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ZymoGenetics started really playing hardball with King Pharmaceuticals in August, and now a high-and-tight fastball has come right back at the Seattle biotech company.

The projectile in question is a lawsuit filed on November 2 by Bristol, TN-based King in the U.S. District Court in Eastern Tennessee; the suit accuses ZymoGenetics of false advertising, unfair competition, and other violations of federal and Tennessee law. King went so far to ask a federal judge to impose three temporary restraining orders to stop ZymoGenetics (NASDAQ: ZGEN) from making certain claims comparing the two drugs—and it was successful for a couple of days until Zymo got the restrictions overturned on Friday.

The suit, it seems, is at least partly a response to a move made in the summer by ZymoGenetics, maker of a drug for surgical bleeding, to try to get King’s rival product pulled from the market. For those not following all of the two companies’ maneuvering, here’s a quick summary.

The incumbent product, Thrombin-JMI, is made by Bristol, TN-based King Pharmaceuticals (NYSE: KG) for surgeons to dab or spray onto an organ that’s bleeding too much during surgery. The King product has been around in hospitals since 1995, and generated $255 million in sales a year ago. Surgical bleeding drugs (called topical hemostats in the operating room) are used in an estimated 1 million surgeries a year in the U.S.

But ZymoGenetics, whose own drug was approved in January 2008, has been arguing for years that it can do a lot better. The King drug is derived from clotting proteins called thrombins in cow blood. Since that’s from a foreign source, the human immune system recognizes it as such, and can spark a reaction that can lead to severe bleeding and death, ZymoGenetics has argued.

The challenger in this niche market, ZymoGenetics developed what it considers a safer alternative, recombinant thrombin, a genetically engineered copy of the human thrombin protein. Because the new drug is a human, rather than cow, protein, it shouldn’t provoke as many immune reactions or dangerous bleeding episodes, ZymoGenetics has contended. But ZymoGenetics has struggled to convince doctors that they need to switch, and it has backed away from earlier attempts to charge premium prices. The company forecasts that it will generate $28 million to $30 million in sales of the drug this year.

Back in August, ZymoGenetics found another venue besides the marketplace in which to wage this fight—the FDA. The company gathered evidence of two cases in which physicians attributed patient deaths to bad reactions on its competitor’s drug, and 23 more cases of severe complications. That was some of the ammunition contained in a 31-page citizen’s petition the company filed with the FDA, in which ZymoGenetics asked the agency to pull the drug off the market for the sake of public health. “There are physicians using Thrombin-JMI without a clear understanding of its risks,” said ZymoGenetics CEO Doug Williams in an interview with Xconomy in August. “There are at least three better alternatives in the marketplace now.”

King, a company with a $2.7 billion market capitalization, didn’t comment at the time. But it obviously decided that when ZymoGenetics started playing hardball, it was time to follow suit.

King challenged the ZymoGenetics citizen petition …Next Page »

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Bothell, WA-based Verathon, which markets a simple ultrasound technology to help doctors diagnose common bladder disorders, has been acquired by Sarasota, FL-based Roper Industries in a pair of transactions worth a combined $356 million.

Roper (NYSE: ROP), a company with a market capitalization of $4.8 billion, made the announcement Friday. It said it acquired Verathon and Montgomery, AL-based United Toll for a combined $356 million, although it didn’t break out the value of each individual company. Adding those two companies will boost Roper’s revenues by more than $140 million in 2010, the company said.

Verathon has been one of the under-the-rader success stories in the Seattle-area ultrasound cluster. The company, formerly known as Diagnostic Ultrasound, was founded by Gerald McMorrow about 25 years ago. It is best known for a fast, easy-to-use diagnostic tool called BladderScan that, like the name suggests, does 3-D scans of the bladder to spot common urinary problems that urologists and primary care physicians want to look for. The company later diversified with another diagnostic tool called GlideScope, which is supposed to help doctors get a clear look inside a patient’s airway so they can do fast and efficient insertions of breathing tubes. The company has grown to more than 400 employees worldwide, according to its website.

The management teams at both Verathon and United Toll are expected to stay on the job after the deals close, Roper said.

News of the deal was reported earlier today by TechFlash.

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Kirkland, WA-based Clearwire (NASDAQ: CLWR) is about to receive an investment of at least $1.5 billion led by Sprint Nextel, according to the Wall Street Journal. Sprint will invest $1 billion, and its partners, including Comcast, Intel, Time Warner Cable, and Bright House Networks, will chip in an additional $500 million, for continuing support of Clearwire’s WiMax broadband network. Google, which has invested previously in Clearwire, is not participating in the current financing round. The official announcement could come as early as this week, the WSJ reports.

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PaxVax, a San Diego startup backed by Seattle’s Ignition Capital, has raised $2 million of a planned $6 million investment round, according to a document filed Friday with the Securities and Exchange Commission.

The biotech was founded in early 2007 to develop new oral vaccine technology based on a common cold virus called the adenovirus. The company says its vaccine, which is administered as oral tablets, avoids much of the requirements that conventional vaccines require—including cold storage for the vaccine itself and inoculation by qualified medical personnel. PaxVax says its oral tablets can be stored and distributed at room temperature, and are self-administered.

PaxVax says its vaccines also can be produced in large quantities and at record speed and low expense compared with traditional vaccines derived from egg culture. The company also says an oral vaccine may yield a more robust immune response than traditional vaccines.

The biotech was co-founded by Ken Kelley, who has worked in biotechnology for more than 25 years, including such companies as IntraBiotics Pharmaceuticals of Palo Alto, CA, and Integrated Genetics (acquired by Genzyme), and with such venture capital firms as K2 BioVentures and Latterell Venture Partners, according to the PaxVax website.

PaxVax’s board includes Ignition Capital operating partner Rennie Coit, who represents the Seattle VC firm at PaxVax. A pediatrician who got his medical degree at UC San Diego, Coit previously worked as a strategic planning consultant to clients that included academic medical centers, health insurance proviers, medical research organizations and global health providers. He also served as the chief operating officer of the University of Washington Medicine Neighborhood Clinics.

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There’s lots of buzz in the startup community about agile software development; there are software programs, books, and seminars on the topic, and even huge firms like IBM are now touting their “agile development solutions”. The general idea is to create a team and a software process that is flexible, quick, and adaptive to feedback from the market. Put stuff out there, collect feedback on what works, kill what doesn’t, improve what does, rinse and repeat.

But there’s a parallel trend occurring in the early stage technology market that hasn’t been talked about much. Programs like TechStars, Y Combinator, and Founder’s Co-op have been pioneering what I like to call agile organizational development. These “initiator” organizations provide founding entrepreneurs with an incredibly compressed calendar of iterative feedback on all aspects of their company. The feedback comes from a broad network experienced entrepreneurs who serve as mentors in these programs, and it comes often, regularly, and relentlessly.

Mentors in these programs provide feedback on the startup’s team, 30 second pitch, fund raising pitch, positioning, product, pricing—on just about every aspect of the organization. Some of the feedback is contradictory—just like market feedback can be. The TechStars program even has a name for the confusion that results from conflicting advice: “mentor whiplash”.

The net effect of all this mentor input is a set of organizations that adapt to market feedback much more nimbly than startup organizations of the past. This feedback cycle and the entrepreneurs’ response is what I’m calling agile organizational development, and my bet is that the companies that embrace it are much more likely to succeed than those that don’t.

These programs are all relatively new, and there aren’t any books or seminars on the topic yet—but I’m betting there will be.

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“People say if you fail in Seattle, you’re screwed,” said Marcelo Calbucci. “If you fail in the Bay Area, you just have a badge of honor.”

We were at the TechStars reunion event in Seattle last week, listening to early-stage investors Brad Feld, Andy Sack, Steve Hall, Greg Gottesman, Shawn Broderick, and Chris Sheehan speak about entrepreneurship and the tech startup scene in their respective cities. Calbucci, the founder of Seattle 2.0 and Sampa (which folded in August), was asking the panelists about how the tolerance of failure, whether real or perceived, affects a region’s culture of innovation.

It’s a deep question, and it continues the discussion of startup cultures in different cities that I highlighted last week. It’s also part of a debate on failure that has been going on since long before I wrote about it in Xconomy last January. There seem to be two camps. Most entrepreneurs I’ve talked to feel there is a stigma associated with having a failed startup in Seattle. Most venture capitalists, not so much. But it’s a much broader issue than just Seattle. My colleague Bruce talked with a Web 2.0 startup founder in San Diego last week who said his first failure, earlier this year, “was truly a painful experience, and I’m still not over it.” And meanwhile, Brad Feld, the co-founder of TechStars and Foundry Group in Boulder, CO, had some provocative things to say about the failure aspect of Boston’s culture.

But first, Andy Sack of Seattle’s Founder’s Co-op gave his perspective on having failed at his last startup, Judy’s Book, after having had three successes prior to that. “As much as you teach entrepreneurship, as much as there’s supply of capital out there, really when push comes to shove, entrepreneurship comes from within,” he said. “I couldn’t take a job at any of the big companies. We’ve been through the tech boom of the ‘90s. We’re just coming off of a major hiccup. I’d say right now, early-stage investors in Seattle have retreated some; venture capital has retreated some, they’re focused primarily on their portfolio. That said, you [Calbucci] failed and went out and started your own thing. I failed and went out and started my own thing. Because we didn’t know any better. The entrepreneurs that don’t know any better, they just go do it again.”

Greg Gottesman of Seattle-based Madrona Venture Group is one of those VCs who says he doesn’t see failure as a black mark. “My sense in this community is, to people who matter most, I don’t think failure is a huge negative,” he said. “There are certain types of failures, like failure of integrity—that’s hard to recover from. But failure of a startup, just speaking with all my partners, that’s not a negative. We talk about that as a learning experience. It’s just another piece of the puzzle.”

So how does Seattle’s tolerance of failure differ from, say, Boston’s or Silicon Valley’s? Feld, who has been investing nationally for 15 years, said, “I actually believe that the shtick of ‘failure as a badge of honor’ is really great shtick. I’ve failed a lot. It’s hard to fail. Failure impacts a person in …Next Page »

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Kent, WA-based LaserMotive has won $900,000 in a NASA competition to build a small prototype device that one day could help lead to a commercial “space elevator,” a cable that could transport cargo to and from outer space. The news was reported by the New York Times and other outlets. LaserMotive, a laser power-beaming company, is led by Thomas Nugent and Jordin Kare, who both also work with Bellevue, WA-based Intellectual Ventures. The power-beaming project and competition was reported by TechFlash earlier today.

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I’m not going to do justice to this event. Let’s just get that out there right now. There were some great speakers and panels at yesterday’s Entrepreneur University in Bellevue, WA, organized by the Northwest Entrepreneur Network. But this isn’t about them. This is about the crowd-pleasers that brought an otherwise productive day to a close. That’s right—this is about pornography and Bacon Salt.

Not necessarily in that order, though. About a year ago, I profiled Bacon Salt, a couple of ex-Jobster guys in Seattle who hit upon a recipe for success: make everything taste like bacon. Their strategy of social media promotions—together with their natural charisma and some great-tasting food products (I can vouch for Baconnaise too)—has led to national exposure on ABC News, Oprah, Jay Leno, and the Today Show, not to mention a couple of segments on Jon Stewart (you can watch them here and here) that started it all.

Bacon Salt co-founder Dave Lefkow gave the closing keynote at the NWEN event, telling his company’s story from the beginning. From starting a food company on $5,000 (won from America’s Funniest Home Videos) instead of the $20 million usually expected in the industry, to fundraising and growth, to marketing and profitability, and now to Operation Bacon Salt—airlifting the company’s bacon-flavored condiments to U.S. troops in places like Afghanistan.

Through it all, Lefkow stressed the importance of finding evangelists for his products—including a couple in Virginia who tattooed the Bacon Salt logo on their legs. “These are people we don’t know,” he said. Bacon Salt also started a website in response to some kids who have snorted Bacon Salt…and put video clips on YouTube.

There are a few more updates to the story. He says Bacon Salt is “currently developing the world’s first meat-flavored personal lubricant.” I still don’t know if Bacon Lube is real or a joke, but Lefkow says he has found a company to manufacture it, and we can expect it in 2010. Other new products will include Bacon Pop (popcorn, not soda) and Bacon Ranch (a dressing, I think).

On a more somber note, Lefkow announced a charity event to benefit children with cancer. His four-year-old daughter was recently diagnosed with leukemia. The “Bacathlon,” billed as the world’s first bacon-themed athletic competition (including an eating contest), will be held the night of November 19 at Heaven Nightclub in Pioneer Square.

The last session at the NWEN event, after a few cocktails, was “Entrepreneur Idol”—seven lucky contestants got to pitch the audience and a panel of media judges (including yours truly) on their startup idea in 60 seconds. This is not an easy thing to do. Of course, we judges had the easy job of sitting back and giving our critiques; I hope some of the feedback was actually useful.

If there was one lesson, it was this: porn wins. Danielle Morrill got everyone’s attention by pitching her idea for a live video streaming adult-content service aimed at couples, called StreamHer.com (like Ustream, but for porn). After that, pitches on business productivity, IT consultancies, and mobile apps felt, well, less stimulating.

In the end, our judges’ picks were Firestarter Labs (T.J. Goan), which does software and services to create better presentations; Buzzeromatic.com (Andres Krogh and Matt Steckler), a Web service for granting front-door access to apartments and condos; and yes, StreamHer.com (Danielle Morrill). I’d also like to thank Jim Byers, Michaela Romanova, Nick Reed, and Gaven Kanemori for pitching us on their cool ideas and companies.

I was told afterwards that I was the “Randy” of the Idol judges. Better than Paula Abdul, I suppose.

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Just came back from the Washington Biotechnology & Biomedical Association’s annual meeting in downtown Seattle, where 500-plus biotechies and distinguished guests (including more than a few local politicians) gathered for a quiche-and-berries breakfast and some keen networking.

The keynote speaker was Elias Zerhouni, the former director of the National Institutes of Health and now a senior fellow at the Bill & Melinda Gates Foundation. Just a few highlights from his talk here:

Zerhouni laid out the top five challenges in public health, as he sees it. Nothing too surprising, but a good way to frame the whole healthcare discussion:

1. The shift from acute to chronic conditions. (“This is a worldwide issue,” he emphasized. “This is the new global health horizon.”)

2. Aging population.

3. Health disparities.

4. Emerging and re-emerging infectious diseases. (Pandemics, for example.)

5. Emerging non-communicable diseases. (Things like obesity and depression, the latter of which the World Health Organization predicts will be the No. 1 cause of disability and dysfunction for people aged 25-44.)

As a world-class radiology researcher, Zerhouni also spoke to the scientific challenges the industry faces. He said the fundamental scientific barrier to doing “translational” research—that which leads to new products like drugs or devices—is the complexity of biological systems involved in diseases. “The explosion of data does not equate to explosion of knowledge,” he said. (This is a common theme across all fields of science and technology.)

On this front, Zerhouni stressed the importance of both external and internal sources of innovation. Meaning, the state of Washington should “find ways of bringing in collaboration on the translation or creation of knowledge.” He pointed out that “building relationships with the Asian Rim is probably your strategic advantage.”

For the politicians in the audience, Zerhouni noted, “Today when you get elected or not elected, the main driver is jobs, jobs, jobs.” He said his dream is that in a few years, biomarkers and healthcare stats will impact political campaigns, to the tune of, “In my district, Body Mass Index has dropped from X to Y.” (Luke previously reported on the issue of jobs being the driver of public support for biotech.)

The last issue Zerhouni addressed was a particularly interesting one: culture wars around science and technology. “Don’t be oblivious to the political, cultural, and moral aspects” of biotech and biomedical work, he said. “Be careful to not assume that everyone in the world believes what you do is holy and good.” Having dealt with the profound issues of evolution vs. creation in Washington DC—most notably in the context of stem cell policy—Zerhouni was sharing some hard-earned wisdom that everyone in the room could take home with them.

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You know how listening to music on a friend’s pricey Bose headphones makes it harder to tolerate your tinny little speakers at home, or watching your favorite show on a high-definition screen spoils you for regular TV? I’m at a moment like that in the way I look at photographs. For the last few weeks, I’ve been playing around with a new computerized technique called high dynamic range (HDR) photography, which can lend a stunning level of brightness, contrast, and detail to digital images. And now every traditional non-HDR image that I see looks flat and dull by comparison.

It’s a dilemma, actually, because the HDR “look” can be peculiar, artificial, even surreal. If you lived in a world where every photograph was made this way, you’d have a constant migraine. But for now, I’m a little bit addicted to HDR. And at the risk of getting you addicted, too, I want to talk this week about how the technique works, what you can do with it, and how it can help all of us question some of the conventions and expectations we’ve built up around the art of photography, and around the related art of looking at photographs.

HDR images are unusual because they don’t represent a single moment in time, like most photos, but rather are digital fusions of several images of the same scene, taken at different exposure levels. (In photography, the longer the exposure time, the more light gets captured by a camera’s film or digital sensor, and the brighter the resulting image.) To collect raw material for an HDR image, photographers generally take at least three pictures: one that’s underexposed, one that’s overexposed, and one at a normal exposure. This is called exposure bracketing. The easiest way to explain is to do a bit of show-and-tell:

1. Normal Exposure

2. Underexposed

3. Overexposed

Digital cameras have come a long way in the last 10 years, but the sensors inside them are still nowhere near as good as the human eye at handling the huge variations in luminance that occur in the natural world. (Photographers call this variation dynamic range.) As you can see from Photo 1 above—the one taken at the standard exposure level that my camera chose automatically—the trees look okay, but the sky is pretty washed out. That’s because the camera, in choosing an exposure that would capture some detail in the hills and leaves, wound up gathering too much light from the much brighter sky above.

The HDR process offers a way to compensate for this technological limitation. If you examine the underexposed image (Photo 2) above, you’ll notice that the landscape is pretty dark, but there’s a lot more detail in the clouds—you can actually see how shapely they are. Conversely, in the overexposed image (Photo 3), the sky is a featureless white blur, but you can see a lot more stuff happening in the trees—detail that was largely lost in the shadows in the normal exposure.

…Next Page »

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I was chatting with a couple of local investors at the TechStars (seed fund and mentorship program) event in Seattle on Wednesday. They thought the VC panel discussion of the startup climate and culture in different cities around the country was boring. If you’re an entrepreneur or investor, they said, that’s just where you are, and you deal with it.

But au contraire, mon frère—as a journalist and outside observer—I view those comparisons across different innovation clusters and their respective histories as a way to generate some good stories and insights. On the panel, there were certainly some constructive (and at times controversial) things said about the entrepreneurial climate in Seattle, Boston, and Boulder.

Here are a few edited highlights from the panelists, several of whom bring an outside perspective to their current cities:

Brad Feld of TechStars and Foundry Group gave a brief history of the startup scene in Boulder, CO—useful for any city with entrepreneurial aspirations. “When I showed up in ’95, what I found was on the software side you had a lot of smart engineering talent but you didn’t have much else. A handful of entrepreneurial companies in storage and cable infrastructure. Not much in the way of entrepreneurial executive leadership other than from these pockets. In the mid-90s, because of the counter-culture community—and the Internet was purpose-built for places like Boulder—you had a lot of people who were independent, very smart, doing their own things suddenly intersecting with a medium that allows you to be anywhere. It’s 100,000 people plus 25,000 college students. A pretty small town, but it has the largest percentage, per capita, in the United States of computer scientists and PhDs. Yet there wasn’t a broad wave of entrepreneurial experience,” Feld said.

“In the mid-to-late 90s, there was huge activity around the Internet. Anybody with a pulse could get a company started. The predictable thing eventually happened, there was a lot of wreckage. But from ‘95-2001, Boulder had imported a lot of executive talent—CEOs, VP sales, engineering leadership. We also had a lot of entrepreneurs who had one or two companies in that cycle. So by 2003, people were starting to come back and get re-engaged in entrepreneurial activity. There were probably 50-plus people that made $10 million or more, so there was enough of an angel community. There was critical mass around this. But what was missing was something that tied the community together. There was the endless cocktail party circuit of entrepreneurs. Eventually people got bored and stopped going.”

That led David Cohen, Feld, and others to form TechStars in Boulder. “It cemented this notion of first-time entrepreneurial activity is the core of the ecosystem. What was needed was fresh meat into the system. We got a lot of new, young people into the community,” Feld said. “The other thing was that one of the hardest things for first-time entrepreneurs is to have an engaged relationship with an experienced entrepreneur. We found we were creating this thing that integrated the whole value chain of entrepreneurs. It really energized the existing entrepreneurial activity around a thing.”

Chris Sheehan of CommonAngels then gave his thoughts on the Boston innovation scene. [Disclosure: Chris is on Xconomy’s board.] “In the IT ecosystem in Boston, there are a number of things going on,” Sheehan said. “It’s a wonderful place for universities and colleges. MIT has been the granddaddy in terms of the entrepreneurial ecosystem. But what I’m seeing is a fresh set of energy coming …Next Page »

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Light Sciences Oncology, the Bellevue, WA-based developer of an unusual drug-device combo treatment for cancer, has put itself in position to raise $35 million for its product development through setting up a line of credit and offering investors warrants to buy shares, according to a regulatory filing released today.

The latest financing comes about 16 months after Light Sciences Oncology pocketed $40.1 million in venture capital. The newest transaction gives Light Sciences Oncology the right to access a $23.3 million line of credit, along with access to $11.8 million more if investors choose to exercise warrants, according to the regulatory filing. The company hasn’t yet borrowed money under the line of credit, the document says. CEO Llew Keltner, the super-busy CEO I profiled last year, couldn’t immediately be reached for comment. If Light Sciences collects the full amount, it will have raised $172 million for its drug development programs since inception.

Light Sciences Oncology is attempting to develop the first treatment of its kind against cancer. The system works by using a light-emitting diode, guided by a biopsy needle, which doctors can thread inside a solid tumor with the help of an ultrasound or CT imaging machine. The patient is then injected with an inactive chemical drug called talaporfin sodium (Aptocine). Once the light is turned on, powered by cheap AAA batteries, it is designed to activate the drug to kill tumors while sparing nearby healthy tissue. The light stays on for almost three hours, during which time the patient can watch TV or read a magazine. After the treatment period, the patient goes home.

The technology is being put to the test in a pivotal clinical trial of more than 200 patients with liver cancer. Light Sciences Oncology hasn’t yet announced the results of that study, which began recruiting patients in November 2006. But other signs from the company have suggested that it likes what it is seeing so far. In August, Light Sciences started two new clinical trials of the technology for two very different applications—treating children with neurofibromatosis, and for treatment of an enlarged prostate, also known as benign prostatic hyperplasia.

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Want to know what the real opportunities are for startup companies and investors in the field of Web search and information discovery? Or what happens when you put Google and Bing in the same room? You’ve come to the right place.

We’re putting the finishing touches on the program for our next Xconomy Forum, on the future of search and information discovery. It’s all happening on the evening of November 30 in Seattle, at the University of Washington (Kane Hall, Walker-Ames Room). You can see the writeup and program here.

In addition to our panel—which includes Brian Bershad from Google, Harry Shum from Microsoft (Bing), Steve Hall from Vulcan Capital, and Oren Etzioni from the UW, Madrona Venture Group, and Farecast—we’ll have a series of “bursts” from some of the most exciting startups working in information discovery today.

We have confirmed short presentations from four startups:

—Evri, led by CEO Will Hunsinger. This Seattle company is trying to reinvent Web browsing by understanding the content of Web pages and the connections between entities on the Web, using semantic algorithms.

—SEOmoz, led by CEO Rand Fishkin. This Seattle-based firm focuses on search engine optimization and Internet marketing, helping companies around the world boost their Web traffic and expand their business.

—Topsy, led by CEO Vipul Ved Prakash. This San Francisco startup is working on a novel search engine for social media, starting with Twitter. It’s what people call “real-time search,” and it’s based on Internet conversations, not documents.

—Sage Bionetworks, led by CEO Stephen Friend. This Seattle-based nonprofit is trying to do for biology what Twitter and Facebook did for social networking, and what Linux did for open-source software. It’s a tall order, but search technology is key to allowing biologists to find and share results in a common global database.

We’re really looking forward to the discussions on Nov. 30, and hope to see you there (registration info here).

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Seattle-based RealNetworks is cutting 4 percent of its worldwide staff today, about 70 out of 1,700 jobs, according to All Things Digital. The report cites the economic downturn and cost-cutting as reasons for the move. Last week, RealNetworks (NASDAQ: RNWK) reported a small profit for the third quarter, the company’s first profitable quarter since the first three months of 2008.

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The local life sciences scene was pretty quiet this week, although we heard more than usual from medical device companies.

—Paul Yager, the University of Washington’s chair of bioengineering, offered a detailed status update on a tool called the DxBox his lab has been developing the past four years in collaboration with Redmond, WA-based Micronics, Seattle-based PATH, and Bothell, WA-based ELITech Group, all with the support of the Bill & Melinda Gates Foundation. They are seeking to develop a portable, fast, accurate, and rugged diagnostic tool to help doctors in the developing world, and while there’s been a lot of progress, it’s entered the “put up or shut up” phase, Yager says.

—Seattle-based Dendreon turned in its complete application to the FDA for clearance to start marketing its first drug, sipuleucel-T, (Provenge) in the U.S. This filing came a bit earlier than Dendreon had forecasted, but it’s also a lot later than the company originally hoped when it first asked the FDA for approval, which you can read more about in this Dendreon history piece I did back in April.

—The Institute for Systems Biology said it has commissioned Mountain View, CA-based Complete Genomics to sequence the full genomes of 100 individuals as part of a Huntington’s disease experiment. This experiment is said to be the largest ever to use full human genome sequences.

—We’ve seen a few medical technology companies that are seeking to repair damaged tissues without leaving behind any implantable devices, and Bothell, WA-based QuantumCor is the latest. CEO Vern Dahl described his company’s plan to do this for a form of heart failure known as mitral valve regurgitation.

—Seattle-based Calypso Medical Technologies, the maker of a device to pinpoint radiation therapy for prostate cancer to minimize side effects, formed a collaboration with Siemens Healthcare. The companies will seek to develop the technology for pancreas and lung tumors.

—We also had an insightful guest editorial from Anthony Rodriguez, a Ph.D. bioengineering student at the University of Washington and an aspiring entrepreneur. He contends that it takes a village to raise an entrepreneur, and that while a few organizations have made some effort to cultivate young entrepreneurs at the UW, the business community could be doing much more.

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Len Jordan, a general partner at Seattle-based Frazier Technology Ventures, will be joining Madrona Venture Group, also based in Seattle, as of January 1, 2010. Jordan will start at Madrona as a venture partner, the firm announced today, and will identify and lead new investments across technology areas like software, mobile, and Internet, as well as helping coach entrepreneurs and existing portfolio companies.

The other half of the story is that Frazier Technology Ventures will not be making any more investments beyond follow-on rounds for its existing portfolio companies. “We aren’t making new investments, and we’re not raising another fund. Earlier this year, we made that decision,” Jordan says.

Jordan joined Frazier in 2003 after a distinguished career at RealNetworks, where he was a senior vice president in charge of media systems, and also worked on products in mobile and gaming. Before that, he spent a number of years in the software business at two companies in Oregon—Creative Multimedia and Central Point Software (both were acquired). Jordan currently represents Frazier on the boards of Control4, DS-IQ, Medio, and Wetpaint, and will continue his duties with those companies.

“We’ve known Len for a long time, back to his RealNetworks days,” says Matt McIlwain, a managing director at Madrona. “It’s a clear fit from a culture perspective and an investment perspective…He’s a very experienced and seasoned venture capitalist. He’ll make decisions while functioning in a partner capacity.”

It sounds like Jordan’s skills and relationships are pretty complementary tofit well with the existing Madrona team. “We really like the fact that Len has significant operating experience,” McIlwain says.

Jordan concurs, “What I can add is early-stage operating background. This is a team sport.” He says he wants to “be able to sprinkle any help” where it is needed in Madrona’s portfolio. “There are a lot of relationships I have that may be complementary to Madrona on the deal flow side,” he says. “I have deep relationships with BestBuy, T-Mobile, Verizon, HP. In terms of deal sourcing, I’ve found this is a very person-to-person business.”

I asked Jordan more about the future of Frazier Technology Ventures. “The current fund is in the fifth year of a 10-year cycle. You won’t see any changes in the foreseeable future,” he says. He adds that FTV has 11 active portfolio companies. “The irony is the portfolio will actually do quite well,” he says. “Frazier has a great portfolio, but we’re also a relatively new group. In a regular fundraising environment, you’d probably be fine.” (Frazier Healthcare Ventures remains a separate family of funds, as always.)

Meanwhile, Madrona has continued to strengthen its team recently. In August, the firm added former aQuantive CEO Brian McAndrews as a managing director, bringing in more expertise in digital advertising, marketing, and media. The addition of Jordan helps the firm more on the software and operational side. “What really excites us about Len is he’s a strategic thinker who has experience both in the technology side of companies and in having a board member view,” McIlwain says. “The highest and best use for Len is looking to develop investment themes, meeting with companies, and making a couple of new investments.”

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I caught up yesterday with noted entrepreneur and investor Martin Tobias, after his latest startup, Seattle-based Kashless, announced a partnership with RecycleBank to reward people for recycling items at Kashless.org. The basic idea is a rewards program—redeemable for merchandise at hundreds of retailers—for people who give away things like old clothes, food, bikes, electronics, or other equipment online.

Since I last reported on Kashless last winter, the “recommerce” firm has rolled out its free online marketplace and community website in 122 cities around the U.S. The partnership with RecycleBank, a New York-based firm and fellow RRE Ventures portfolio company, should help Kashless acquire new members. Kashless currently has tens of thousands of members, while RecycleBank has hundreds of thousands. “They’ll promote their members to join Kashless,” Tobias says. “They’re rewarding people for separating their trash, and we’re rewarding people for extending the life of products they’re no longer using.”

Tobias says the deal puts his company “over the top” and should help convince more people to give away their stuff on Kashless.org instead of Craigslist, Freecycle, or Goodwill stores. “We’ve been working hard to make Kashless.org the best place for people to find and give away free things,” he says. The rewards program “adds to the things we’ve already been doing, like driving directions [to available items] and tax deductions. It further differentiates us and makes it more valuable to give things away through us.”

Kashless is now staffed by five full-time employees and a couple of contractors. That’s down from about a dozen earlier this year, during the bulk of the company’s product development work. Tobias says there are more than 500,000 active listings on the website.

The company’s revenue model is a combination of advertising on the consumer site and licensing of the software platform to brands and communities that want to boost their recycling. The latter “private label” portion of the business makes up the majority of Kashless’s revenues, Tobias says.

I asked Tobias for the weirdest thing anyone has given away on the site. He named a couple items off the top of his head: a live monkey in a cage, and a tugboat up on blocks in someone’s yard. “An interesting thing for us is that everything posted on Kashless has been taken by somebody,” he says.

Tobias then remembered that he had once advertised a broken urinal from his old house. (I didn’t ask.) “Some guy said, ‘I’ve been looking for that.’ He thought he could fix it.”

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Seattle-based Movaya Wireless, a mobile software startup, has been acquired by Digby, a mobile commerce firm based in Austin, TX. Financial terms were not announced. Movaya was founded in 2006 by Phil Yerkes and Stanley Wang, and recently has been focused on making digital goods storefront applications for the iPhone, Android, and other mobile Web platforms. The company has a development team in China that will serve as the basis for Digby’s operations in Asia.

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