SEC accuses former venture capitalist of stealing deals from his own firm.

When we last checked in with Matt Crisp, he had just settled a nasty piece of litigation with some of his former partners at (now-defunct) venture capital firm VSP Capital — including current San Francisco mayoral candidate Joanna Rees. Lots of allegations of adultery, hacked email, fraud, etc. And it didn’t work out well for Crisp, who agreed to pay an undisclosed amount in a settlement.

Now Crisp is back in hot water, this time with the Securities and Exchange Commission.

Upon leaving VSP, Crisp had joined Adams Street Partners as a Silicon Valley partner focused on VC investments. He left shortly thereafter, claiming to have joined an undisclosed startup. At the same time, however, there were rumors that his swift departure from Adams Street had been anything but voluntary.

According to the SEC, the split came after Crisp admitted to having formed a secret investment fund to siphon opportunities away from Adams Street. From the SEC:

While working as a partner and fiduciary of Adams Street Partners… Crisp and a friend secretly formed a private investment vehicle called AV Partners LP. Crisp then usurped from Adams Street’s funds, for AV Partners, a lucrative investment opportunity in a private company….

Crisp further enriched himself with a personal payment of $150,000 during a later buyout of the same private company. That money should have gone to Adams Street to reduce the fees due from its private equity funds. Crisp’s deceit also secured for AV Partners a second investment opportunity in another private company in which Adams Street’s funds invested. Further, Crisp attempted to arrange a second payout to AV Partners from that same company. Although later forced to repay the money, Crisp initially profited by over $2 million from this conduct, at the expense of Adams Streets and its private equity funds.

What a ridiculous mess. Adams Street isn’t known for having the VC world’s top compensation, but why on earth would Crisp feel the (alleged) need to commit such blatant fraud? Particularly after having just been involved with VSP — an experience that others spent years trying to distance themselves from? The only thing I can think is that he wanted money to help fight his existing lawsuit — someone once suggested to me that he settled with VSP because they had too many financial resources — but that would be a remarkably short-sighted explanation.

No comment yet from Adams Street, and I’m still trying to track Crisp down. As of now, he does not seem to have formally responded to the SEC. Here is the Agency’s entire release:

Filed under: Term Sheet

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Bank analysts covering AT&T (T) are beginning to chime in on the Department of Justice’s attempt to kill the telecom giant’s proposed $38 billion acquisition of T-Mobile. Here is a sampling:

James Radcliffe of Barclays Capital
“We believe that the deal is by no means dead, as the DOJ has stated that the “door is open” for AT&T to propose remedies, but the fact that the DOJ took this strong step this early in the process makes the probability of completion much lower. We now view the probability of success at 35-40%, down from our previous 75% view. We view the news as negative for T, positive for towers, slightly negative for VZ, and positive (although not universally so) for S.”

David Barden of BoA Merrill Lynch
“Based on AT&T’s reaction statement and prior comments, it will fight the move on the grounds a national competitive framework deviates from precedent. The upside to fighting for T is it will delay payment of the $3bn breakup fee, paralyze T-Mobile for some period and potentially muddy Sprint’s strategic choice-making.”

Mike McCormack of Nomura
“We believe that the current state of the wireless industry is too competitive, with six or more parties seeking share via price and subscriber subsidies. Without the combination of AT&T and T-Mobile, we think the outlook for equity investor returns is curtailed by ARPU deceleration and subsidy acceleration headwinds.”

Jennifer Fritzsche of Wells Fargo
“If it is not approved, we would remind investors that while T likely would need more spectrum longer term (like VZ), it does have over 20 MHz of 700 MHz spectrum in the top 100 U.S. markets. We anticipate that T would pull back on its commitment to over 95%+ of the U.S. with LTE. But in no means do we believe T is a broken wireless story without T Mobile in hand.”

Christopher King of Stifel Nicolaus
“We believe that a blocked deal would ultimately be good news for Sprint insofar as it would maintain the status quo in the U.S. wireless market and open the doors for a potential Sprint, T-Mobile deal. However, we also note that today’s DOJ announcement focused frequently on the benefit of having four national wireless carriers—suggesting that a Sprint-TMO deal may not be an easy sell with regulators, either.”

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A solar energy CEO discusses the pending bankruptcy of Solyndra, which had raised more than $1.5 billion from private investors and the U.S. government. 

By Barry Cinnamon, contributor

The epitaph for Solyndra is significant because of what was not a factor in their demise.  It was certainly not for a lack of trying. But more importantly, it was not because of Chinese competition or a lack of U.S. government support.

Chinese solar panels are 10-20% less expensive than U.S.-made panels; but by some estimates, Solyndra’s panels were 100% more. It’s a mistake to blame Solyndra’s problems on our lack of manufacturing commitment or relatively higher labor costs compared to China.  Solar panels are commodities being sold on the worldwide market on a $/watt basis — much as aluminum is sold on a $/kg basis. It is crystal clear that cheap and easy to install solar panels are exactly what the U.S. needs to reduce our energy costs and create installation jobs.

For five years or more, the U.S. government was providing support for solar manufacturing in the U.S.  The DOE Loan Guarantee program provided critical funding for Solyndra’s manufacturing growth, supported by over $1b in private capital. Unfortunately, both these private investors and the DOE made a couple of bets on Solyndra that didn’t pan out.

The first bad bet was that refined silicon, the feedstock for the solar panel industry, would stay expensive. Solyndra invented a solar panel that didn’t use expensive silicon. Unfortunately for Solyndra, and fortunately for all the silicon solar panel manufacturers and customers, silicon has gotten very cheap over the past few years. So the problem that Solyndra solved — expensive silicon — disappeared.

The second bad bet was that Solyndra’s flat roof installation technology would make up for their relatively expensive panels.  Solyndra did indeed see big savings on flat roof installations, but the rest of the industry did not stand still. Other commercial flat roof products are on the market (full disclosure, Westinghouse Solar has an inexpensive and easy to install flat roof solar panel product) with similar benefits at much lower costs to Solyndra.

Management and investors finally pulled the plug when two things became brutally apparent.  First, that silicon wasn’t going to get expensive again. And second, Solyndra’s installation advantage couldn’t overcome similar products that were on the market at much lower prices.

It was a great attempt at solving a big problem: Reducing solar installation costs. I hope the U.S. Government is made whole on their DOE loan guarantee (which, notably was initiated during the Bush administration). I hope we don’t bash overseas manufacturers for making commodity solar panels cheaper than we can in the U.S.; after all, we all want inexpensive solar panels. And I hope that Solyndra technology and employees continue to thrive in the emerging clean technology industry which they helped to pioneer.

Barry Cinnamon is CEO of Westinghouse Solar (WEST), a maker of solar power systems.

Filed under: Contributors, From the Crowd, Venture Capital Deals

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Exxon landed a big deal with Vladimir Putin. Should shareholders be concerned?

FORTUNE — Are we a nation of people willing to climb into bed with any strongman just to make a buck? First we learn that a swath of software companies helped Libya’s Moammar Gadhafi chase down Libyan people who disagreed with him. Then we find out that Oracle (ORCL) is being investigated for possibly violating the Foreign Corrupt Practices Act in making payments to people who matter in Western and Central African countries. Whatever happened to making money the old-fashioned way?

But there’s no better evidence that shareholders of publicly-traded U.S. companies are helping foreign autocrats keep their stranglehold on power than the news this week from ExxonMobil (XOM). CEO Rex Tillerson stood beside Russian kingpin Vladimir Putin yesterday morning to announce that the oil company had cut an awesome deal with Russia to find new arctic oil reserves.

Putin, of course, is no longer president of Russia, but as Prime Minister he retains all the traits inherent in any dictator. And he uses the same playbook of nationalizing assets as Venezuela’s Hugo Chavez. Has no one at ExxonMobil heard of Yukos? As part of the deal with Tillerson and his gang, Russia’s state-owned oil company, Rosneft, has taken an equity stake in some of Exxon’s U.S. projects. Exxon surely has no plans to steal those stakes back in a few years, but there’s every reason to believe that’s what Putin will do to Exxon’s investment in the Russian arctic.

BP (BP) is the loser in this deal, even though all it lost out on was being the favored partner of a dictator.

“Others can weigh in on the legitimacy of  various governments,” Exxon spokesman Alan Jeffers says. “We are not doing  business, as far as I’m aware of, with anyone with which we are prohibited from doing so.”

He’s right, and Exxon employees are actually proud of their partnerships with the likes of Putin. A recent posting on an Exxon blog declared that “Americans benefit both from ExxonMobil’s U.S. and global operations in the form of taxes, jobs, and shareholder returns.” It’s that last part that gets at the nub of the issue: at what price do we seek profit? I usually sit back in awe at Putin’s Machiavellian tactics—he’s one of the more entertaining dictators around—but I’d never partner with the man.

How about the idea that we might not want to deal with countries that screw shareholders out of their ownership? Last I heard, Exxon had taken a principled stand against the kind of government that appropriates other people’s assets when it feels like it. Venezeulan dictator Hugo Chavez made a power grab for Exxon’s local oil assets five years ago, and the company and country have been stuck in international litigation ever since. ExxonMobil lost about $12 billion of shareholders’ money in that experience, but it’s not clear Tillerson learned anything from it. A new deal with Chavez can’t be too far in the offing.

Look, I’m no bleeding heart ninny who looks at the world in black-and-white. We’ve partnered with Middle Eastern autocrats for decades because it helped keep the U.S. engine going. I understand that shaking hands with dishonorable leaders comes with the job of running a global company. I spent part of my childhood in Saudi Arabia, right next to the ARAMCO compound. I saw the devil’s handshake up close.

But to commit nearly half a trillion dollars to working with them? Should American companies—or American shareholders—really be doing deals with the likes of the Russian government? I say no. I’ve got no problem selling them Big Macs or iPads. But lining Kremlin insiders’ pockets in exchange for access to their oil fields? Aren’t we better than that?

Rex, might I introduce you to the real Vlad Putin? He’s the clown who claimed to have discovered ancient urns in six feet of water last week. (For some reason, he wore scuba gear to get to them, adding hilarity to hilarity.) Perhaps he’ll take you on a dive trip to find your next oil well.

Filed under: Term Sheet

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One of America’s most expensive cleantech bets just bit the dust.

Solar panel maker Solyndra today said that it will file for Chapter 11 bankruptcy protection, after failing to successfully compete against lower-cost Chinese manufacturers. It is one of largest failures ever suffered by venture capitalists, and a major black eye for a U.S. Department of Energy that loaned the company more than $500 million.

The company has not yet filed its bankruptcy papers, but did say in a press release that it plans to evaluate options that could include a sale of its business and licensing of its technology. It also said that 1,100 full-time and part-time employees will be laid off, effective immediately.

Since being founded in 2005 to build solar panels for commercial rooftops, Solyndra had raised nearly $1 billion in private equity financing. The biggest backer was the George Kaiser Family Foundation, which was listed as holding more than a 35% equity stake when Solyndra filed for a $300 million IPO in late 2009 (it would later cancel the offering, due to “adverse market conditions). Other significant shareholders included Madrone Partners, a VC firm affiliated with Wal-Mart’s Walton family, with an 11% stake, U.S. Venture Partners (10.19%), RockPort Capital Partners (7.5%),  CMEA Ventures (6.81%) and Redpoint Ventures (5.94%).

Some of those positions were subsequently diluted, when a new debt financing this past spring reportedly converted certain existing shares from preferred into common.

Solyndra’s $535 million loan guarantee was made in 2009 by the Department of Energy, and has since come under scrutiny by House Republicans who have suggested that not enough due diligence was conducted. DoE already is pushing back against the meme today, with a blog post that argues the company was felled, in part, by slashed European subsidies for solar cells (an argument Solyndra CEO Brian Harrison also makes in the company’s press release).

What DoE does not discuss, however, is that Solyndra’s products were far more expensive than the typical solar maker — offering a long-term value proposition with high up-front costs. “Solyndra really bet on changing how solar is installed,” says Rob Day, a cleantech venture capitalist and blogger. “It was an interesting idea that just didn’t work out.”

A source tells Fortune that Solyndra has called down $527 million of the DoE loan guarantee, after meeting a variety of performance and financing milestones (including the building of a manufacturing facility). The final check arrived earlier this summer.

DoE’s loan guarantee was ”secured by a first priority security interest,” which would seem to imply that DoE is high on the list of creditors (we’ll know for sure when the bankruptcy doc is filed next week). The VCs, on the other hand, may well be washed out (particularly those holding common stock).

[Update: A source says that the $75 million debt that Solyndra raised earlier this year would be repaid before repaying DoE]

DoE declined to comment beyond its blog post. Solyndra and its VCs have not yet responded to Fortune’s calls.

• Also at Fortune: What went wrong at Solyndra

Filed under: Term Sheet, Venture Capital Deals

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Not so fast AT&T

The year’s second-largest merger suddenly faces a giant roadblock.

The U.S. Department of Justice has sued to block AT&T’s (T) planned $39 billion acquisition of T-Mobile from Germany’s Deutsche Telekom, on antitrust grounds. FCC Chairman Julius Genachowski also said today that the proposed tie-up raised “serious concerns” for his agency.

AT&T expressed surprise at the move, and said it would defend the merger in court.

AT&T shares are off more than 4.5% on the news, perhaps in part because AT&T would have to pay Deutsche Telekom $6 billion (including $3b in cash) were the deal to fail. Sprint (S) shares, on the other hand, are up more than 8% to $3.83 a piece. Verizon (VZ) is down 1.4%.

All of this comes just hours after AT&T announced that it would bring 5,000 call center jobs back to the U.S. after the T-Mobile acquisition closed. It also said that it would increase its U.S. infrastructure investment by more than $8  billion, which could create around 96,000 new U.S. jobs. The company did not, however, publicly discuss how many job losses could result from the merger, due to redundancies with T-Mobile.

Source: Reuters

That could be a pretty big bargaining chip with the jobs-hungry Obama Administration, and the timing perhaps indicates that AT&T knew what Justice had planned for today.

At a press conference, Acting Assistant Attorney General Sharis Pozen said: ”We conducted dozens of interviews of customers and competitors, and we reviewed more than 1 million AT&T and T-Mobile documents.  The conclusion we reached was clear.  Any way you look at this transaction, it is anti-competitive. Our action today seeks to ensure that our nation enjoys the competitive wireless industry it deserves.”

Bank analysts are still scrambling to digest the news, but Wells Fargo’s Jennifer Fritzsche has already released an initial report. She says, in part: “If it is not approved, we would remind investors that while T likely would need more spectrum longer term (like VZ), it does have over 20 MHz of 700 MHz spectrum in the top 100 U.S. markets. We anticipate that T would pull back on its commitment to over 95%+ of the U.S. with LTE. But in no means do we believe T is a broken wireless story without T Mobile in hand.”

What follows is a copy of the DoJ complaint, filed in U.S. District Court in Washington:

Filed under: Term Sheet

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No, they don’t plan to produce “one last run” in order to make it up in volume

TouchPads quickly sold out at $99. Source: HP

Can you spot the dissemblance in the announcement posted Monday on Hewlett-Packard’s (HPQ) The Next Bench blog?

Despite announcing an end to manufacturing webOS hardware, we have decided to produce one last run of TouchPads to meet unfulfilled demand. We don’t know exactly when these units will be available or how many we’ll get, and we can’t promise we’ll have enough for everyone. We do know that it will be at least a few weeks before you can purchase.

That’s right. It’s there in the first sentence. HP management has made some monumental blunders lately, but it knows better than to sell product at a loss just to “meet unfulfilled demand.”

There may be a lot of reasons — although as an Apple (AAPL) iPad owner I can’t think of any good ones — to buy a $499 orphaned device when its price suddenly drops to $99.

But the only reason I can think of for HP to start manufacturing new TouchPads for sale at that price is the one suggested Tuesday by Taipai-based Digitimes.

It seems no one was more surprised by HP’s announcement that it was pulling the plug on the TouchPad than its upstream suppliers, who according to DigiTimes’ sources are suddenly suffering from component overload:

The sources pointed out that the inventory level is capable of producing about 100,000 7-inch TouchPads and was originally set to start production at the end of the third quarter, but HP’s sudden change of strategy has completely messed up upstream player’s schedules.

Solution: Repair relations with your Asian suppliers by pushing those components through the factories. And then give it a positive spin by telling your customers that you are doing it just for them.

Filed under: Apple 2.0

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Spoondate.com takes familiar concepts from Facebook and Match and mashes them up with Yelp. Question is, can it get a bite of the big market for niche dating sites?

FORTUNE — I’m guiding my cursor down a page of cravings: “I’m craving deep dish at Little Star Pizza.” “I’m craving carrot cupcakes at American Cupcake.” “I’m craving oh-so-creamy burrata at Asellina Ristorante.” It’s nearly noon; my stomach yelps.

This isn’t a restaurant recommendation or recipe web site, though. It’s Spoondate, a new online dating network for foodies.

It works like this: users sign in using their Facebook account and sketch a profile of themselves based on culinary preferences. Basic questions and prompts include ‘With a $25 meal allowance, I would…,’ ‘My food personality is…,’ ‘In addition to food, I enjoy…’ At the top of the page a big box asks, “What are you craving?” These cravings are similar to Facebook’s status updates. Other users can comment on cravings (Yum!, Crave It!) or simply use them to break the ice and potentially meet up to satiate appetites.

The San Francisco-based Spoondate is the creation of Raissa Nebie, a Wall Street veteran who is no stranger to business trips peppered with lonely meals. During one of those trips, Nebie enjoyed several courses at a restaurant, companionless, only to have the owner pick up the check for the entire the meal — out of pity. “It’s depressing to eat alone,” she recalls. Three years later, after a stint at culinary school in France, she’s got seed funding from 500 Startups and the Initio Group to try to help out other lonely diners across the country.

Spoondate won’t be alone, though. The site, which is slated to launch the week after Labor Day, will compete directly with GrubWithUs.com and HowAboutWe.com, both of which aim to take the awkwardness out of online dating with an activity-friendly premise. The site is launching in the midst of a plethora of niche dating sites. Networks based on religion (Jdate.com), age (Seniorpeoplemeet.com) and sex (Manhunt.net, Ashleymadison.com) have flourished to supplement industry giants eHarmony.com, Match.com and Plentyoffish.com.

David Evans, the editor of OnlineDatingPost.com, says the top five U.S. sites attract the lion’s share of users and revenue. The venture-backed eHarmony.com is reported to throw off about $250 million in annual revenue for instance. Smaller sites, meanwhile, find themselves having to pay to buy ads to maintain user bases of just 30,000 to 40,000, according to Evans. But that doesn’t mean fledgling sites can’t pay off for investors. Earlier this year, Okcupid.com, started in 2004 using quirky surveys and polls to attract users, was acquired by Match.com owner IAC/InterActiveCorp (IACI) for $50 million.

For now, Spoondate is focused on building an audience. Nebie and her team of three intend to closely monitor all posted cravings, ensuring that they are referencing real food and real places in a bid to maintain quality and defend against spam. (The site will start in San Francisco and expand virally from there.) They are also counting on their fresh idea and the site’s broad appeal for growth. Users can use it to find a casual date or a platonic meal partner. And the wealth of information about users’ eating habits and favorite restaurants could lead to a lucrative location-targeted or deals-based advertising model.

But despite a clever premise and a clean design, Spoondate is still missing one big feature: a success story. Of the 1,000 people using a beta version of the site over the past few months, only 30 or so serially update their cravings. Of those, just three have actually gone on Spoondates. All ended in “food friendship,” according to Nebie. If Spoondate hopes to grow, it’s going to have to lead to more than a few long-term engagements.

Filed under: Uncategorized

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Conventional wisdoms says the two major sites dropping out of the deal is good for Groupon and Living social. Conventional wisdom is wrong.

FORTUNE — When Facebook announced that it was ending its experiment with daily deals after less than four months, Reuters, like many, claimed the move “may ease some competitive pressure on industry leaders Groupon and LivingSocial.”

Not even close. Competitive pressures are precisely why Facebook is abandoning deals and why Yelp is now scaling back on the feature too. Their exit from the market won’t ease anything. There are still hundreds of companies offering deals, and there will likely be more because the barriers to entering the market are very low. That means margins will keep falling. Facebook and Yelp are getting out of what is, for them, a bad business.

That doesn’t mean it’s bad for everyone, though. There will likely always be a market for online coupons. But the ease of market entry and the fact that most deal services aren’t differentiated from each other makes for a toxic combination for companies like Groupon and LivingSocial hoping to dominate the market. Customers have no compelling reason to stick with, for example, Groupon; they can easily go to Living Social or any other such service without losing anything. When Groupon came on the scene, it was called “the next eBay.” But eBay works because that’s where all the sellers are. With deals, the sellers are all over the place, each of them just a click or two away.

True, Amazon (AMZN) is getting into the game with its AmazonLocal service. But that only proves the point: Amazon is tying its deals alongside its core business by offering subscribers discounts on goods Amazon already sells. That will likely boost the company’s revenues and, more importantly, give customers a reason to stick with Amazon for deals. That doesn’t mean the experiment will work for sure, but it gives Amazon a distinct advantage.

Groupon, meanwhile, is gearing up for its IPO. It lost $420 million last year and $220 million in the first half of this year. It’s hard to imagine how things will get much better for the company as competitive pressures inevitably continue to mount.

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