ThePort Network has raised $500k from existing investors in an extension of its Series B round. ThePort provides businesses with social network and social media services. A couple years ago we covered ThePort as part of a broader look at ways to build your own social network, which included a detailed look at a number of players in the space here.

American City Business Journals led a $4.1M Series B in ThePort in December 2008 and has not looked back. Over the last year recurring revenue has grown 90% topping $2M. The company’s products target associations, media companies and nonprofits and have found success in the government sector. Major clients include the American Diabetes Association, the American Bar Association, the American Lung Association, the Sierra Club and as CEO Bob Cramer diplomatically put it, “a major political party”.

The company plans on using the new funding to grow its sales and marketing efforts. ThePort has read the tea leaves and as part of that push ThePort plans to open an office in Washington DC in 2010. The company also hopes to reach profitability next year.

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Service-now.com has raised $41M of a $66M funding round, the company disclosed in an SEC filing today. The company was founded by Fred Luddy in 2004 to provide on-demand Enterprise IT services and 2009 has been a boom year for the company. Service-now.com specializes in cloud-based Software as a Service (Saas) IT service management solutions. They cover everything from licensing compliance to the service desk all with a built in analytics system.

On July 21 of this year a company press release detailed some of the company’s accomplishments including: recurring revenue of more than $28 million, 105 percent growth in recurring revenue and a variety of accolades. We’re awaiting word from Service-now.com about the funding. In the meantime we can deduce that some of the funding is probably from Sequoia Capital. Douglas Leone, who may have already been an investor, has become a director and the page of Partner Patrick Grady has been updated to reflect a new involvement with Service-now.com (Nov 30 and now).

Interestingly, the company did not gain much capital from the funding. The SEC filing notes that $37M of the funding was used to repurchase shares of the Service-now.com’s common stock held by its CEO Frederic Luddy and CFO Andrew Chedrick. That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It appears investors Sequoia Capital and JMI Equity were okay with it in a big way this time around.

Update: We’ve just received word from CEO Fred Luddy confirming that Sequoia led the investment and that the entire round went towards buying employee stock, not just his own and his CFO’s. He sounds excited about the involvement of Sequoia and Douglas Leone.

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This year alone, the Dollar dropped 20% against the Shekel, causing startups to run out of money quicker than what they expected. In the article “Start-ups stuck in winter doldrums“, Globes interviews Erez Shachar, a managing partner at Evergreen Venture Partners, and touches on the influence that the weakening of the dollar (hence the strengthening of the Shekel) has on Israeli startups.

Here’s a recap of the situation:

* Israeli companies raise money in Dollars, but pay operating expenses in Shekels.
* Effectively, their burn rate is higher the weaker the Dollar gets.
* Salaries, estimated at 70% of the startup’s operating expenses, are the biggest cash spender.
* As a result, the quickly disappearing cash reservoirs that startup companies relied upon, force the startups to initiate financing rounds again sooner than expected.
* Venture capitalists and company managers already realize that an exchange rate of NIS 3.70/$ can quickly become NIS 3.40/$, and are preparing accordingly.

In his comments, Erez Shachar says that the problem is acute with Evergreen’s portfolio companies:

“This is why we’re encouraging companies to look at other markets, such as Europe and Asia as a kind of hedge against the exchange rate situation. It’s the right thing to do in any case. The market orientation of Israeli companies has always been the US, and the time has come to look at other markets. There’s no reason not to sell to and hook up with Asians and Europeans.”

It’s common sense to know that if the US falls into a recession, the value of the dollar will fall further. Michael Eisenberg, a partner at Benchmark Capital, gives a few measures to deal with the situation in his post “Open Letter to my CEOs and Israeli Entrepreneurs“. Worth a read.