Welcome to the first issue of Pro Rata. Well, sort of. Let's call this the beta version, since we'll have more functionality and other good stuff once the full Axios platform launches later this month.

For those who subscribed to my prior newsletters at Fortune and Reuters, welcome back. I've missed you. For newbies, much thanks for signing up. For everyone, let's get to the business of business…

• Coming attractions: MuleSoft, a SaaS integration company that has raised over $250 million in VC funding, is quietly prepping for an IPO. Word is that the San Francisco-based company hired banks like Morgan Stanley to manage the offering. MuleSoft could become the year's second enterprise software "unicorn" to go public, with AppDynamics having already filed its S-1. A company spokeswoman declined comment.

• 2018 vintage watch: This is going to be a "put up or shut up" year for tech-focused venture capital. Most of the big domestic firms raised new funds in 2016, often via the siren song of unrealized valuations. For some, this was the second straight cycle of whispering sweet distributions into LP ears. But it's hard to imagine that institutional investors will accept paper promises for a third time, which is why VCs need some of their bigger bets to exit in 2017. Or else there will be a culling of the herd.

No worries, say many VCs, who are predicting a bumper crop of tech IPOs beyond just Snap (see Wilson, Fred). Then again, we heard the same thing about 2016. Before China's economic data. And Brexit. And our Kafkaesque presidential election. Optimism is good. Tempered optimism is better.

• Creative destruction: Sun Capital Partners on Friday disclosed that it will shutter all retail locations of portfolio company The Limited, which will put around 4,000 people out of work (including approx. 800 full-timers). But the private equity firm reportedly told its investors not to worry about the remaining value being written down to zero, because it already generated 1.8x cash-on-cash via earlier dividends.

This was always a bit of an odd deal, because Sun basically backed the company twice: First via a 75% purchase in 2007, and then again in 2010 when it bought the remaining 25% (shortly after which it did the dividend recap). When it first got in, Sun was involved with a clothier that hadn't generated profits since 1993. The financials flipped by 2009, so Sun viewed its subsequent buy-in as providing liquidity on a normal timetable to LPs ― following a successful turnaround ― while effectively doubling down on the future (which didn't work out so well).

That said, it seems to me that The Limited could still be in business, and its workers still employed, if it hadn't used a dividend recap to drain company coffers for the sake of what amounted to an LBO hedge...

• Something familiar: Former TechCrunch co-editor Alexia Tsotsis is on the TC-to-VC highway, per multiple sources who say she is in the early planning stages for a first-time venture capital fund. Target would be $20 million, with Tsotsis working alone (at least initially). She left TechCrunch in early 2015 to enter the MSx program at Stanford's biz school, which she completed last summer. No comment from Tsotsis, natch.

• Moving In: Bain Capital Ventures today will announce the addition of Yumin Choi as a managing director focused on healthcare. He previously was with HLM Venture Partners, and basically fills a BCV role that has been vacant since Jeff Crisan left in 2015 to launch Silversmith Capital Partners.

Choi's thoughts on the future of America's healthcare system, vis-a-vis ACA repeal: "Anyone who tells you they know what it's going to look like is lying to you, but I think we'll all be surprised in the end by how similar it becomes to what it is now. Value-based care, for example, is here to stay in some form."

• Healthcare VC/PE consensus: So long as the product (drug, device or service) works and is cheaper than the alternative, then someone will pay for it.

• What is Axios? At some point soon I'll write the "why I joined a VC-backed startup" post, particularly given that I've covered startups long enough to know the odds. For now, however, three things: (1) Our manifesto; (2) More on the biz model, per today's WSJ; (3) You have my assurance that I was not involved in fundraising for Axios, nor will its investors have any influence on this publication. But, for full disclosure, our outside backers are: Lerer Hippeau Ventures, NBC, Greycroft, Laurene Powell Jobs/Emerson Collective, Steve Rattner, Greg Penner, David Bradley, Eric Ruttenberg and Terry O'Toole.

• Keep in touch: If you want to provide feedback, share news or drop a dime, there are way too many available avenues. Email (dan@axios.com), text (857-472-3072), Confide, Telegram, WhatsApp, Signal, Twitter DM (@danprimack) and our anonymous tip box (which goes directly to me). Plus, if you send a carrier pigeon to the home office, I promise to open my window.

Neiman Marcus, a luxury retailer owned by Ares Management and Canada Pension Plan Investment Board, on Friday withdrew IPO registration, saying only that such an offering "not in its best interests... at this time."

Why it's the BFD: Physical retail is struggling, and this move by Neiman Marcus is a notable reflection on the trend. Just last week came word that Macy's and Sears/Kmart were closing a combined 218 stores (here's a map), not to mention The Limited situation. And this is nothing new. Neiman Marcus has reported five straight quarters of declining comp sales, and hadn't even bothered to update its IPO registration since first filing in August 2015.

Bottom line: "Neiman has admitted, luxury shoppers are harder to win over now than before, more impatient to buy items they see on the runway and less willing to wait eight months for those items to be in stores. And the Internet has made comparison shopping that much easier, eroding shopper fealty." -- Phil Wahba, Fortune.

• Cavion, a Charlottesville, Va.-based developer of T-type calcium channel modulators for the treatment of neurological diseases and cancer, has raised $26.1 million in new VC funding. Lilly Ventures and Novartis Venture Fund co-led the round, and were joined by Enso Ventures. www.cavionpharma.com

• Eleven James, a New York-based wristwatch rental platform, has raised around $9 million in new VC funding, per an SEC filing. http://bit.ly/2i9ZSOS

• MyTomorrows, a Dutch, has raised €10 million in new VC funding. EQT Ventures and Octopus Ventures co-led the round, and were joined by return backers Balderton Capital and Sofinnova Partners. http://tcrn.ch/2iYT1Zz

• Macrophage Pharma, a British drug startup focused on anti-tumor treatments, has raised £9 million in Series A funding. CRT Pioneer Fund led the round, and was joined by Novo Seeds and Aglaia Biomedical Ventures.

Private equity investors historically cautious about tech invested more than $135 billion in the sector in 2016. What changed? Will the allure of big returns outweigh potential risk? Cooley’s take.

• Citic Capital and The Carlyle Group have agreed to acquire an 80% stake in the China business of McDonald's Corp. (NYSE: MCD) at an enterprise value of around $2.08 billion. Citic would hold a 52% stake, while Caryle would hold a 28% stake. http://on.wsj.com/2i8PB5s

• AVI-SPL Inc., a Tampa, Fla.-based provider of audio visual systems integration and collaboration solutions, has acquired VideoLink LLC, a Newton, Mass.-based provider of video production solutions. No financial terms were disclosed. AVI-SPL is a portfolio company of H.I.G. Capital. www.videolinktv.com

• Bain Capital Private Equity has acquired MSX International, a Detroit-based provider of business process outsourcing to the auto industry. No financial terms were disclosed. Sellers include Falcon Investment Advisors, Goldman Sachs and Prudential Financial. www.msxi.com

• BaltCap has agreed to acquire the Baltic business of Selecta, a Swiss vending and coffee services company backed by KKR. No financial terms were disclosed. http://bit.ly/2jkvTBi

• LLR Partners has acquired BluVector, a "machine learning threat detection and cyber hunting solution," from Northrop Grumman (NYSE: NOC). No financial terms were disclosed, except that LLR is committing $50 million in new growth capital to BluVector. www.bluvectorcyber.com

• Magneto Commerce, a Campbell, Calif.-based provider of cloud e-commerce solutions, has raised $250 million in new equity funding from Chinese private equity firm Hillhouse Capital. The company continues to be majority-owned by Permira. http://bit.ly/2iuSnjg

• National Response Corp., a Great River, N.Y.-based portfolio company of J.F. Lehman & Co., has acquired Water Truck Services Inc., a Sherwood, Ore.-based provider of waste management and environmental services. No financial terms were disclosed. www.nrcc.com

• McCubbin Hosiery, an Oklahoma City-based portfolio company of Guardian Capital Partners, has acquired Robeez, a Canadian provider of soft-soled footwear for babies and toddlers, from Stride Rite. No financial terms were disclosed. www.robeez.com

• One Equity Partners has agreed to acquire Anvil International, an Exeter, N.H.-based maker of pipe fittings and system components, from Mueller Water Products (NYSE: MWA). No financial terms were disclosed.

• Onex Corp. is in advanced talks to acquire Ferrara Candy Co., an Oakbrook Terrace, Ill.-based non-chocolate confectionary, from L Catterton, according to Reuters. The deal could be valued at around $1.3 billion. http://reut.rs/2i8rkJD

• Trilantic North America has acquired a majority equity stake in United Subcontractors, a St. Paul, Minn.-based provider of installed insulation and related services to builders, contractors and homeowners. No financial terms were disclosed. www.usiinc.com

• Atlassian (Nasdaq: TEAM) has agreed to acquire Trello, a New York-based online collaboration service, for approximately $425 million (including $360m in cash). Trello only raised a single round of venture capital funding, securing a $10.3 million Series A round in 2014 at around a $40 million pre-money valuation. Backers included Index Ventures and Spark Capital. http://bloom.bg/2iUwvPh

• Miura Private Equity has sold GH Electrotermia, a Spanish provider of induction heating equipment and heat treat solutions, to ParkOhio (Nasdaq: PJOH), for approximately $31 million. www.pkoh.com

• Summit Partners has sold Peak Well Systems, a Perth, Wash.-based provider of downhole tools for flow control, well intervention and well integrity, to Schlumberger (NYSE: SLB). No financial terms were disclosed. http://bit.ly/2iWTNGz

• Invitation Homes, a Dallas-based residential REIT backed by The Blackstone Group, has filed for a $100 million IPO. That's likely a placeholder amount, as Renaissance Capital estimates the offering could raise upwards of $1.5 billion. It plans to trade on the NYSE under ticker symbol INVH, with Deutsche Bank serving as left-lead underwriter. http://bit.ly/2ju6Akx

• Ambry Genetics, an Aliso Viejo, Calif.-based genetics diagnostics company with around $160 million in 2016 EBITDA, is seeking a buyer, according to the WSJ. Intrepid Investment Bankers is managing the process. http://on.wsj.com/2juk13P

• Ipsen (Paris: IPN) has agreed to acquire certain assets of Merrimack Pharmaceuticals (Nasdaq: MACK), including pancreatic cancer drug Onivyde and ovarian cancer treatment Doxil, for upwards of $1 billion. http://reut.rs/2j76SKT

• Nasty Gal, a Los Angeles-based fashion retailer focusing on young women, has received U.S. bankruptcy court approval to sell its brand and customer database for $20 million to Boohoo. The company had raised around $65 million in funding prior to its bankruptcy filing, from firms like Index Ventures, Thrive Capital and Hercules Capital. http://tcrn.ch/2i9xgoJ

• Optum, a unit of UnitedHealth Group (NYSE: UNH), has agreed to acquire Surgical Care Affiliates (Nasdaq: SCAI) for approximately $2.3 billion, or $57 per share (17% premium over Friday's closing price). Surgical Care is a Deerfield, Ill.-based owner and operator of multi-specialty ambulatory surgery centers and surgical hospitals. http://bloom.bg/2iZkM4v

• Axiom Asia Private Capital has closed its fourth Asia-focused private equity fund-of-funds with over $1 billion in capital commitments. www.axiomasia.com

• PivotNorth Capital has closed its third seed fund with $35 million in capital commitments. http://bit.ly/2iRHElJ

• Streamlined Ventures is raising upwards of $40 million for its second seed-stage fund, according to an SEC filing. http://bit.ly/2iZB3q4

• Scott Graves has joined Ares Management as a Los Angeles-based partner and head of distressed and special situation investing. He previously spent over 15 years with Oaktree Capital Management. www.aresmgmt.com

• Smaiyra Million has quietly stepped down as a partner with Highland Consumer Fund, where she will continue to serve as an advisor. No word yet on her future plans.

• Mitchell Mom tells Pro Rata that he is leaving Rock Health in order to join iSeed Ventures.

• David Park has been named chief investment officer of the Korea Teachers Pension Fund. He previously was CIO of Allianz Life Insurance in South Korea. http://bit.ly/2ju2OYh

• Harvest Partners has promoted Steve Duke and Sean Murphy to managing directors in its non-control private equity practice. www.harvestpartners.com

• J.F. Lehman & Co. has promoted William Hanenberg from VP to principal. www.jflpartners.com

According to a 2016 NYSE Governance Services/Veracode Survey Report

• Eighty-five percent of those involved in an M&A transaction say they would likely or very likely be affected by “major security vulnerabilities.”
• Fifty-two percent would still go through with the transaction but only at a significantly reduced value.

Best practices for acquirers and targets when navigating this uncharted territory.