Dan'l Lewin, corporate vice president of Microsoft's Strategic and Emerging Business Development, has a good view of the tech startup climate from his post in Silicon Valley, where he helps get Microsoft's tools into young companies' hands.

He shared his observations and more about the announcement today of the "BizSpark" program, giving qualified startups three years of access to an array of Microsoft software for $100 (story, program site), in an interview yesterday.

Here are condensed excerpts:

A day after Berkshire Hathaway's shareholder meeting, billionaire buddies Warren Buffett, Berkshire's chairman, and Bill Gates, a Berkshire director, were interviewed today on Fox Business Channel. Here's a short story summarizing the conversation, and here are some interesting excerpts from a transcript provided by the Fox Business Network.

Intelius, the company that provides online background checks and sells cellphone numbers to consumers, filed for an initial public offering today, according to documents filed with the Securities & Exchange Commission.

The Bellevue-based company said it hopes to raise up to $143.8 million in the offering. It would trade on the Nasdaq market under the symbol "INTL."

Co-founder, CEO and President Naveen Jain previously founded InfoSpace, which at its height was worth more than Boeing. He was ultimately let go and paid a multi-million dollar settlement amid allegations of insider trading.

A Seattle Times investigation published in 2005 found that Jain, 48, and other InfoSpace executives appeared to have boosted the company's stock value with accounting tricks and dubious deals in 2000. The investigation found they concealed revenue shortfalls and made "lazy Susan" deals in which company officials invested in other firms that, in turn, sent money back that InfoSpace could count as revenue.

At the beginning of every year, millions of Americans make resolutions to get in shape and lose weight.

Sweat365 couldn't have better timing.

Four days after the ball dropped, the Seattle-based company is launching an online social network to help people keep their word.

The company was co-founded by Brad Hefta-Gaub, a former executive at RealNetworks and Revenue Science, who said his desk-bound job made it a struggle to stay in shape. But he managed to work hard to go from 36 percent body fat to a two-time Ironman.

Sweat365 is sort of a cyberspace gym where people gather to talk about work-out preferences. For registered users, the site provides a blogging platform, fitness tracking tools and training information.

But Hefta-Gaub said the beauty of it is that average people are giving advice to people like themselves rather than experts speaking down to them.

The WSA today announced 21 finalists in seven categories for the 13th annual Industry Achievement Awards..

The winners will be announced at a gala taking place Feb. 7 at the Westin Hotel in Seattle. Suzie Reider, YouTube's chief marketing officer, will be the keynote speaker.

This year there was a record number of entries, said Ken Myer, the WSA's president and CEO. Also new to this year's awards is a category called "Technology Leader of Tomorrow," which honors middle school students participating in a technology program at the Technology Access Foundation.

Here's the complete list of finalists:

A spokesperson at Jobster said today Jeff Seely will replace Jason Goldberg, the company's founder, as chief executive.

Seely was the CEO at Sharebuilder until last month when the Bellevue online brokerage was purchased by ING Direct. At the time, Seely said that he planned to look for new opportunities.

The transition will take place Jan. 7.

Jobster's board has been hunting for a new top executive at the recruiting company. Goldberg will become vice chairman of the board.

Redmond-based Smilebox said today that it has raised $7 million in venture capital from Bessemer Venture Partners, and Frazier Technology Partners.

Smilebox is the modern-day Hallmark of sorts. It allows you to upload your digital photos, and then make slideshows, electronic cards, scrapbooks and other stuff.

The company's Web site has a blog link where you can see the "Smilebox of the week." The most recent entry is a slideshow of a family's trip to a pumpkin patch set to music.

The second round of funding will go toward expanding internationally, adding partners and moving Smilebox's features over to new platforms, the company said.

"Smilebox has pioneered the multimedia expressions category and established a proven business model. The service combines technology innovation with a strong focus on ease of use," said Rob Stavis at Bessemer Venture Partners.

Smilebox said in its release that more than 1.8 million users have installed the service since its launch in June 2006, and more than 1.3 million unique users worldwide access it monthly.

A new study suggests that a "staggering" number of entrepreneurs in the U.S. identify themselves as dyslexic, according to a story in the International Herald Tribune.

The report said that of the entrepreneurs interviewed, 35 percent said they were dyslexic. The study also concluded that dyslexics were more likely to delegate authority and to excel in oral communication and problem solving. They were also twice as likely to own two or more businesses.

One good example in our own back yard is Craig McCaw, who has a long list of companies he started: Clearwire, Nextel Communications, XO Communications, Teledesic and McCaw Cellular Communications,

Members of his executive teams frequently describe him as being creative, not too wrapped up in the details, and capable of delegating authority.

The article pointed out that the connection between entrepreneurs and dyslexia has been made before. Fortune had a cover story five years ago mentioning McCaw, but also Richard Branson, founder of Virgin Atlantic Airways; Charles Schwab, founder of the discount brokerage that bears his name; John Chambers, chief executive of Cisco; and Paul Orfalea, founder of the Kinko's copy chain.

Why is this?

Julie Logan, a professor of entrepreneurship at the Cass Business School in London, who conducted the study, said:

"We found that dyslexics who succeed had overcome an awful lot in their lives by developing compensatory skills. If you tell your friends and acquaintances that you plan to start a business, you'll hear over and over, 'It won't work. It can't be done.' But dyslexics are extraordinarily creative about maneuvering their way around problems."

The study was based on a survey of 139 business owners in a wide range of fields across the U.S.

Logan called the results staggering, especially when juxtaposed with the information that about 10 percent of Americans are believed to have dyslexia.

A study released late Tuesday says global venture capital investments this year are on pace to record the highest annual total since 2001, according to Dow Jones VentureOne and Ernst & Young.

This year, investment is expected to top $40 billion at the close of the fourth quarter while the number of deals should reach about 3,884, or similar to levels in 2003.

Driving this growth are investments in a broader range of sectors and geographic areas. The hot areas are cleantech and medical devices, and the two geographic regions of increasing importance are Beijing and Bangalore.

Also driving some of this growth is an increase in exits for VCs, which allow them to get some of their money back.

Here's a chart depicting the number of venture-backed IPOs:

The U.S. is the worldwide leader in cleantech investments:

The report also offered a prediction for 2008. Pending an economic downturn in the U.S. or the world, investing will likely continue to be robust. In addition, large multinational corporations are expected to increase their investments, and new geographies in Asia and growth in health care and cleantech innovations in energy and water will drive further growth.

A study released late Tuesday says global venture capital investments this year are on pace to record the highest annual total since 2001, according to Dow Jones VentureOne and Ernst & Young.

This year, investment is expected to top $40 billion at the close of the fourth quarter while the number of deals should reach about 3,884, or similar to levels in 2003.

Driving this growth are investments in a broader range of sectors and geographic areas. The hot areas are cleantech and medical devices, and the two geographic regions of increasing importance are Beijing and Bangalore.

Also driving some of this growth is an increase in exits for VCs, which allow them to get some of their money back.

Here's a chart depicting the number of venture-backed IPOs:

The U.S. is the worldwide leader in cleantech investments:

The report also offered a prediction for 2008. Pending an economic downturn in the U.S. or the world, investing will likely continue to be robust. In addition, large multinational corporations are expected to increase their investments, and new geographies in Asia and growth in health care and cleantech innovations in energy and water will drive further growth.

The Seattle-area is known for its expertise in the wireless industry.

It is and has been the home of the biggest in the game, including AT&T Wireless, T-Mobile USA, Western Wireless, Nextel Partners, Clearwire and more.

Although T-Mobile and Clearwire are the only remaining wireless operators here, it's no less of a wireless town. Tthe focus is changing instead from infrastructure to software. There are Microsoft and RealNetworks, and a host of smaller venture-backed companies doing everything from search, gaming, photo sharing and social networking.

One company that gets a little less ink, but has been around for years and is making some headway is NetMotion Wireless.

I had a chance to catch up this week with Tom Johnston, NetMotion's senior vice president of product and marketing, to get a status report.

The Seattle-based company isn't doing anything flashy. It is solely focused on the behind-the-scenes of the enterprise workforce. It focuses on helping businesses run efficiently on wireless networks. It does so by helping workers keep their applications up and running even if they momentarily drop their wireless data connection, whether they are traveling through a canyon or repairing an elevator.

What does this mean?

It means that an employee who is using ar laptop or a handheld device in the field won't be kicked out of business applications, such as a billing system, when a cell signal fades. Similarly, police or fire personnel could continue to search driver's license databases when a connection is going in and out.

Without NetMotion, it's often the case that the application will shut down and freeze when a connection is lost. We're not talking about e-mail here, but large billing, expense, sales or other systems. If this happens, an employee often has to call headquarters to report the information, which can be a waste of time.

How does it work?

NetMotion places a server in a company's data center that fools an application into thinking the connection is maintained depsite what is going on in the field.

Johnston said demand for NetMotion products is increasing because more field workers have laptops with data cards or high-end phones.

Today, the company has about 1,000 customers using 200,000 devices. Its revenues for the first three quarters of this year are up 66 percent compared with the same period last year, and the number of licenses has jumped 71 percent.

It serves companies such as Cox Communications, the nation's third largest cable provide. It has 3,500 technicians using NetMotion. The Orange County Sheriff's Department has 400 officers using the software.

NetMotion has come a long way. The company was spun off from WRQ in 2001, and was backed by venture capitalists. In 2006, it had a patent-infringement tiff with Bethlehem, Pa.-based Padcom. They resolved their issues and decided to merge the two companies.

Today, the company has 90 employees.

A little more than a year ago, I wrote a story about Bellevue-based Sotto Wireless, a startup founded by three experienced executives coming out of AT&T Wireless.

The business revolves around simplifying telecommunications for small- to medium-size businesses by selling them one service they can use outdoors on the cellular network and indoors on Wi-Fi. It eliminates multiple bills, phone numbers and voicemail boxes.

A year later, Rod Nelson says the company is in the thick of it, having launched services in Charlotte, N.C., and in Seattle.

Today, it announced it is partnering with XO Communications in Seattle. Sotto will bundle XO's broadband services with its offerings to small-and-medium-sized business, and XO has agreed to resell Sotto's services.

Sotto falls into the highly talked about wireless sector called "fixed mobile convergence," or FMC for short. FMC mixes both the luxuries of landlines with the flexibility of wireless phones.

For instance, someone calling an employee using one of the Sotto phones will have no idea if he is reaching that person in the office or on a mobile phone. Phone calls can be transferred between employees, and all voicemail goes into one inbox.

When the employee is in the office, the phone operates over Wi-Fi, saving minutes on the company's cellular plans, but then it automatically switches over to cellular when the person leaves the office, Nelson said.

He added that the increased attention and focus on FMC has helped the business in the past year. T-Mobile USA started offering a service called T-Mobile Hotspot@Home in that time. That service allows consumers to use a Wi-Fi network in the house for better indoor coverage and to save money.

At the minimum, Nelson said efforts such as those are encouraging more handset manufacturers to include Wi-Fi in phones. Right now, Sotto Wireless resells Nokia handsets, but in the next year he expects to start offering Windows Mobile and other smartphones.

Paul Merritt, general manager of XO in Seattle, said the partnership places XO six months to a year ahead of its competition. He doesn't know of any of his competitors that are reselling cellular services. Because of this, he's allowed all of his 12 sales reps to offer the service to new and existing customers.

"It was a natural fit, there's nothing close to this on the market," he said.

Nelson said if the trial goes well in Seattle, it will eventually will roll out to the 75 markets that XO serves around the country.

Earlier this week, I drove to Bellevue to sit down with Ivan Braiker and Eric Harber, HipCricket's chief executive and president, respectively.

We gathered in Braiker's office, which was surprisingly bare of any decorations, artwork or anything.

Turns out everything is packed up. The company is expanding so fast it needs to move to a larger office. Braiker even joked that as soon as he takes off for a sales trip, the employees celebrate -- up to three employees can fit and work in his office.

They'll have about 50 employees by the end of the year and are expecting to add about four or five a month, Braiker said.

What's HipCricket doing that's driving so much growth?

It helps radio and TV stations make their one-way media become interactive by allowing listeners and readers to send text messages to the station in response to advertising. At the same time, the system is used to increase the effectiveness of the ads. In doing so, the stations' can charge more.

It's good to step back every once in a while and hear examples of what is actually successful and making it in these frothy wireless days, where everyone has an idea for cellphones.

HipCricket seems to be addressing something spot on.

In a report published Tuesday by Seattle-based M:Metrics, 94.9 million mobile subscribers said they sent a text message in the three months ended September, or about 44 percent of U.S. cellphone users.

Here's some of the examples of how HipCricket is being used:

-- KUBE 93.3, the radio station in Seattle, regularly uses the system. For instance, it aired a McDonald's commercial that asked listeners to text a five-digit short-code to get a two-for-one coupon for cheeseburgers.

-- In Los Angeles, a local coffee shop offered a coupon for two-for-one iced lattes.

-- In yet another market, a company holding a job fair said if people sent a text message, they would get a text reminder the day of the fair.

Braiker said that these offers are generating a response rate of about 40 percent, a much greater rate than traditional means of advertising.

"TV and radio has struggled over proving accountability [that people are indeed listening and watching]," he said. "By the end of the day, they now know how many people have replied."

In the case of the L.A. station, Coffee Bean became a HipCricket customer so it could use the technology across all radio stations in all of its markets, not just the one in L.A.

Braiker said this is why HipCricket is growing so fast. Sister radio stations, TV stations, newspapers and even the brands themselves are using its technology.

The company, almost 4 years old, has about 200 customers and has managed 16,000 campaigns.

HipCricket charges a flat rate and provides a number of ways for the stations to make money. The station usually charges an advertiser a premium to add a text message to its commercial, but ads can also be added at the bottom of a text message. For instance, people can text in to get a list of the last three songs that played on the radio. On the bottom of the reply would be a sponsorship ad.

HipCricket can also be used to boost a station's audience. People may be willing to sign up for alerts, telling them to tune in when a prize is about to be given away.

The company has been backed by a number of private investors, and is profitable. But for now, Braiker said profitability is not a goal -- it makes more sense to invest and grow.

"We are in the middle of a land grab," he said.

UPDATE: Late Monday night, HipCricket went public on the London Stock Exchange's AIM. It raised about $17 million and has a market capitalization of $155.4 million. In this press release here, Braiker said: "The additional funding puts us in an excellent position to capitalize on the increasing opportunities ahead of us, providing a strong base to grow the company organically and also fund expansion in US markets. Our AIM listing will significantly enhance our ability to serve our existing UK investors."

In addition to the somewhat controversial statements Microsoft Chairman Bill Gates made Friday about an engineering talent shortage, there were several other interesting tidbits from his speech and question and answer session with an audience of high school, college and professional members of the National Society of Black Engineers.

For starters, the atmosphere in the room at Microsoft's conference center in Redmond differed dramatically from that of Microsoft's annual shareholder meeting, at which Gates spoke earlier in the week. Gates noticed it, too. After waiting through a long and loud standing ovation -- "Thank you. Thanks for having me. Thank you. All right, thanks very much." -- to begin his speech, he said, "I've been at a lot of meetings in this room, but I think you may be the most energetic group we've ever had here."

Gates compared the software development process to a much more mundane pursuit: bread baking.

"The pace is really something because whenever you come out with software, customers love to tell you what's right, they love to tell you what's wrong, and you know you can go out and do something new. It's not like working at a bread company where they ... go back and tell you they don't like bread anymore, and great, well, we're a bread company, what do they expect? We're not going to change our product."

The question-and-answer session, as is often the case with a young, engaged audience, was the best part. There were lots of questions about how Gates got started and how one could emulate his success.

Gates dismissed the personal risk he took of dropping out of Harvard to start Microsoft, saying, "I could have always gone back to school. When I started hiring my friends, and they had kids and things, then it was more risky, could I pay them? So I had to be really sure."

For those wondering how to build a Microsoft-sized company today, Gates said the trick is finding a big opportunity based on a major change that the big players -- himself included -- are missing. "You'd have to have an idea that's revolutionary. ... You'd have to have a breakthrough in artificial intelligence or robots or something that was so big that the existing companies really somehow just weren't getting their minds around it, and doing it well. ... So, you'd better see something I don't see if you want to start a company now."

U.S. private equity firms, including buyout and venture capital funds, have raised $263 billion so far this year, already breaking last year's fundraising record.

Dow Jones Private Equity Analyst reported that the record-breaking money was raised by 364 private equity funds. Last year, $258 billion was raised.

"With the present momentum and a full seven weeks left in the year, we could well see fund-raising break the $300 billion mark for the first time," said Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst.

Buyout and corporate finance funds are attracting the lion's share of the money, accounting for about $203 billion, or roughly 77 percent of all capital raised this year.

Last month, Ignition Partners, a Bellevue-based venture capital firm, said it raised $675 million in capital.

Amsterdam-based ING Direct, which has a U.S. banking subsidiary, said today that it is acquiring Bellevue-based ShareBuilder, an online brokerage business.

ING is paying $220 million, or 152 million euros, for Sharebuilder, which was founded in 1996.

I wrote a story about the company in 2004. At the time, it had 120 employees, and had raised $67 million in venture capital. The company started off as Netstock Direct, and launched ShareBuilder.com in 1999.

The company's business model included having co-branded relationships with more than 40 banks, 140 credit unions and other nonfinancial institutions, including Wells Fargo, National City Bank, Alaska Airlines, Costco and Safeco. It is also known for allowing people to individually invest by dollar figure instead of stock price. The end result is that the purchaser may own a partial share.

In 2005, I wrote about the company again, this time as part of a category of Northwest companies that were growing and had at least 100-plus employees -- and candidates for merger or an IPO.

Dick Harryvan, ING group executive board member and CEO of ING Direct, said in a press release:

"This acquisition is in line with ING Direct's aim to become the world's most preferred consumer bank by expanding geographically and developing its product range, while focusing on growing its mortgage business and investment services."

Voyager Capital, a Seattle-based venture capital firm, said today that it has made four investments from its latest fund.

The new fund, the company's third, has made investments in: Ontela, a wireless company in Seattle; SEMDirector, a search marketing software firm in California; 1020, a California company pioneering location-aware advertising; and Yapta, an internet travel planning service in Seattle.

Voyager's fund has $107 million and will be used to invest in early stage companies in digital media, software and wireless -- both in the Northwest and in California, the company said in a release today.

In 2006, it was reported that Voyager was seeking to raise a third fund worth up to $200 million.

In all, Voyager has about $370 million under management.

When a business group from China visits a business group in Seattle, the odds are you'll see a lot men in dark suits. But earlier this week, an unusual group from China came through town: women entrepreneurs blazing a trail in a country where the odds are not often in their favor.

The visitors included Li Xiao Yan, the young general manager of Beijing Jingcheng Yanda Technology and Trade, a company specializing in energy conservation and management that she founded in Beijing. Li was looking for U.S. partners to provide energy technology products to China. Li's company is already importing energy management products from California. She said that with recent government incentives for technology that helps reduce electricity consumption, the opportunity is huge.

Led by Madam Feng Cui, president of the Chinese Association of Women Entrepreneurs, the eight women attended a reception in the waterfront Medina home of local businesswoman Laurie McDonald Jonsson. It was a reunion for some of the women, who met in China last year during a trip Jonsson organized for Stellar International Networks.

Wistar Kay/Stellar Networks

Li Xiao Yan (middle, in orange scarf) talks with Laurie McDonald Jonsson (in tan suit).

Their American counterparts were local lawyers, doctors, company executives, academics and others interested in making professional connections and friendships in China.

Another visitor, Li Daxiang, chair of Beijing Leitianxiang International Education and Culture Exchange, said she was anxious to meet Americans interested in exchange programs with China. Li said she hoped the problems with Chinese product quality would not put a damper on trade.

Wistar Kay/Stellar Networks

Zhang Zumei, general manager of a Macau investment company Kong Tai Luen Fat, tours the Jonsson house.

All of the entrepreneurs said they hoped that establishing friendships between American and Chinese women would build good will at a time when relations between their two countries are strained.

A few of the Chinese women were visiting the U.S. for the first time. As successful as they have become in the new capitalist China, they were clearly in awe of their surroundings, even without knowing they were just down the street from the richest man in the world. One local guest quipped: "I hope they don't think all Americans have homes like this."

Venture capital investing in clean energy grew by almost 70 percent in 2006, to $18 billion, according to research firm New Energy Finance. And more than $10 billion was invested in companies and projects in the first half of 2007.

The group tracked more than 1,800 investors worldwide and recorded 193 funds that invest in clean energy.

Investment was highest in North America, with most of it going toward biofuels. In Europe private equity investment growth was strong, and in Asia investment was driven by pre-IPO investments in Chinese solar companies

AFP / GETTY IMAGES

Indonesia's biofuels program makes use of palm oil.

Looking at various industries, the investments broke down into $8.4 billion for wind, $4.7 for biofuels and $2.3 billion for solar, which together made up 86 percent of the total venture capital / private equity investment.

The report is available on New Energy Finance's website. It's called "Cleaning Up 2007."

Peter Adkison, the entrepreneur and game developer who sold Wizards of the Coast to Hasbro for $500 million, must have been bored with early retirement.

His new Seattle company, Hidden City Games, is distributing a card game for girls called Bella Sara, hoping to replicate its popularity in Europe here in the U.S.

In this game, every girl can have her own horse, at least a virtual one.

Bella Sara sells cards with whimsical, fantasy images of horses, linked to a game and an online site where players can take care of their own virtual horse. The game, created in Denmark, includes "positive messages designed to uplift girls and reinforce the principle that beauty comes from within," according to its publisher.

Bella Sara got a boost this week with a new distribution agreement allowing the cards to be sold at 2,500 stores around the country, including Borders, Waldenbooks, Barnes & Noble.

The idea that beauty comes from within could meet a challenging time here in the American setting. Considering all the beauty queens with DUIs, rehabs and jail sentences, says Bella Sera's publicist, it was hard to find a celebrity spokesperson "who wasn't a train wreck."

They finally chose Hayden Panettiere, the cheerleader from NBC's "Heroes" and "one of the few good girl celebrities out there," he said. Hope she likes horses, too.

Seattle-based Ultra Unlimited said today that it launched SportsUltra.com, a site that provides custom sports news and video coverage based on the teams, players, blogs and sportswriters that users want to track.

The company said it eliminates the need to bookmark multiple sites to get the news people are looking for.

"Fans are ravenous for up-to-date news about their favorite teams and players, and RSS feeds and national sports sites only deliver a portion of that content for them. With SportsUltra.com, we have created a Web site that will give specific, local, and relevant sports content to these fans, just the way they want it," said Scott Decker, SportsUltra.com's founder.

Several other sports-related Web sites have been founded in Seattle.

Perhaps one of the most high profile was Rivals Network, founded by Jim Heckman. In 2001, the decision was made to sell the company, and it eventually shut down. Heckman was also the CEO at Seattle-based Scout Media, which was acquired by News Corp. in 2005.

Heckman was also behind Seattle-based TheInsiders.com, which charges users a monthly fee for specialized content about National Football League, college and high-school teams. In 2002, Yahoo said it would carry the subscription service on Yahoo's sports site.

Not so hard, says James Sun, CEO of Zoodango and emerging television personality. Sun may have finished his stint on "The Apprentice" as runner-up, but he's launching several ventures that promise to keep him on air.

Brian Casey

James Sun

He has a Hollywood agent out to make the most of his personality, tech skills and business acumen. Decked out in black Prada shades, intern by his side, Sun turned out for a lunch today with Chinese stars visiting Seattle to promote the 2008 Beijing Olympics.

Not everybody can make the transition from reality TV to stardom, he says, "but my agent thinks I can."

The first show he's working on is a techno house program, introducing new kinds of technology and explaining how to set them up at home. Think fun with wireless gadgets and tabletop computers.

The second show is a look at celebrities launching their own businesses. Think Paris Hilton opening a pampered pet store.

Sun says he is also planning to go on a national speaking tour with "Apprentice" winner Stefani Schaeffer. The theme is very anti-Trump: teamwork.

"Stefani and I never backstabbed each other even once," he said.

Even though backstabbing sells on the show, Sun says real business is collaborative.

But with so much going on, how does he even find time to run a company?

"My job is chief evangelist officer," Sun said. Zoodango is getting more users in Los Angeles because he's there so often talking about it.

Besides, his investors have asked him to do a daily video blog about working as a tech CEO. His last blog, a rant about hospital security officers tasering a man holding a baby, was broadcast on television 48 hours after he posted it on YouTube.

"That's the power of the Internet," he said.

Seattle-based Calidora Skin Clinic, which has stores that offer skin care treatments and products, said it raised $4 million to expand into Southern California.

About half of the round was financed by Calidora's existing angel investors, with the remaining funds coming from Fluke Venture Partners.

Calidora has four Seattle-area locations, where people can receive procedures such as Botox injections, cosmetic and restylane, non-ablative skin resurfacing treatments, and laser and light therapies.

In this story, I wrote about how the company got its start. At that point, it had raised $3 million, mostly from Starbucks executives, where Calidora founder Colette Courtion had previously worked.

After leaping out of the gate yesterday with the hottest IPO of the year, VMware is again climbing big-time today, up about 13 percent in midafternoon trading in New York.

That's got to have the people at Seattle-based virtualization startup illumita, which pulled down $6 million in funding last week, feeling pretty good. (Did we mention they're hiring? They are.) Their investors are probably smiling broadly, too, especially the guys over at Bellevue-based Ignition Partners.

An earlier virtualization bet that Ignition made on XenSource paid off handsomely today when Citrix Systems announced plans to buy the company for about $500 million in cash and stock. Here's analysis from Mary Jo Foley on what the Citrix-XenSource combination could mean for Microsoft.

Investors at U.S. venture capital firms raised $3.23 billion to add to their coffers during the second quarter, according to a report published by Dow Jones VentureOne this week.

That represents a decline of 62 percent from the same period last year -- the biggest decline since 2002.

During the period, there wer 15 venture capital funds raised, compared with 25 a year ago. That was the lowest quarterly fund total since the first quarter of 2003.

Although the numbers are down from last year, five huge venture funds skewed the 2006 numbers by raising more than $7.92 billion in capital. And, in 2005, two supersized funds raised $2.6 billion.

Even though funds have not been raising as much money recently, they are still performing well.

On Thursday, a separate report found that venture-capital performance continued to show positive returns in most investment areas during the first three months of the year, according to Thomson Financial and the National Venture Capital Association.

The report said an increase in the first quarter this year shows more companies have gone public or been acquired since the Internet bubble burst.

"The venture capital industry continues to outperform the public markets long term, offering strong returns to its limited partners, which include pension funds, endowments and foundations," said Mark Heesen, NVCA president.

Two local startups and the popular Seattle hip-hop group Blue Scholars have teamed up to promote a contest at tonight's Capitol Hill Block party.

The two companies are Phone Sherpa, which handles the Blue Scholars's ringtone sales on the Jamglue site, and Jamglue, which allows users to create their own song by chopping up bits and pieces and adding new vocals.

Together, Phone Sherpa and Jamglue created an MC and DJ contest for making your own mix to the Blue Scholars' song "Fire for the People." Blue Scholars will pick out the best of the mixes made on Jamglue and add them to their ringtone store.

Also, the first thousand Block Party-ers to show up at a special Jamglue Web page where the contest is taking place will get a free Blue Scholars ringtone when they sign up for a Jamglue account.