Ebb & Flow

VCs continue to put their money to work in public companies with venture valuations. But Seattle Genetics'definitive agreement to sell $40 million of preferred stock to a VC group had an interesting twist: If for some reason shareholders don't approve the deal, the two lead VCs - JPMorgan Partners, Baker Brothers - still can purchase 19.9% of SGEN.

The backstop was put in place because the lead investors wanted to ensure a payoff for all of their due diligence. "We wanted to make sure that if for some reason the shareholders don't sign off on the deal - and there's no reason we think they won't - that we would come away with an investment," said Rod Ferguson, general manager at JPMorgan Partners...