An venture capital industry group has released an updated set of guidelines on how venture capital firms should value their portfolio companies, but disagreement continues about whether the guidelines are appropriate.

The group, called Private Equity Industry Guidelines Group, or PEIGG, suggests venture firms should, among other practices, raise the value of companies they’ve invested in if those companies do well. The increased value should be reflected on the VC firm’s books, even if the company hasn’t raised a new round of funding.

Many venture firms have balked at doing this, because there’s no objective way to tell when a company’s performance has improved enough to merit such an increase. They say the proper time to raise a company’s value should come only during a financing, when investors negotiate with the company to set its value — which is when more market forces are at play in setting a realistic valuation.

See the group’s announcement here.

Here are the updated guidelines.

See our story here.

Casabi, a Cambpell, Calif. company, offers a service to turn your traditional home phone into Internet “smart-phone,” and says it has raised $10 million in a second round of financing from venture capitalists.

The Casabi service integrates your home phone with a phone directory, peer-to-peer VOIP calling, instant messaging presence, local search, and ring-tone and screen customization.

The company says distribution partnerships are being negotiated with Internet portals and regional telephone companies and that it will have a number of announcements in April 2007.

The financing is led by Canaan Partners, and includes previous investors Mayfield Fund and Vanguard Ventures, who invested $5.5 million in August, 2005.

Silicon Valley venture capital firm, Redpoint Ventures, has raised a $250 million “Redpoint Omega” fund to invest in companies that are more mature than the start-ups it typically invests in.

This is the firm’s fourth fund since the firm launched in 1999. While the firm hasn’t made any money for investors on any of its previous funds yet, investors apparently recognize that Redpoint started investing at a difficult time, i.e, right when the Internet bubble burst — and so they are cutting the firm some slack.

Indeed, Redpoint may be about ready to start producing some returns. While none of its companies have gone public yet, one investment, Big Band Networks, filed last month to do so. A few of its companies have been acquired, with Topspin and Intermix (owner of MySpace) being among the more significant ones. It has a bunch of private companies that are showing traction, including Calix, Zimbra, Fortinet, Right Media, Kazeon, HomeAway, Entropic and LifeSize, to name several.

Partner Tom Dyal said the firm has made several investments in mature companies from its previous funds, including Intermix, Fortinet and HomeAway. However, 70 percent of Redoint’s capital has been invested in early-stage companies, he said. One reason for raising money specifically for investing in later-stage companies is because more companies are bootstrapping through their early years, and so venture capital firms are often investing later, with larger amounts of capital.

The firm has ten partners, with eight in the valley, and two in Los Angeles. It has an associate in Shanghai.

The firm will remain focused on wireless mobile, interactive media content, Internet services and traditional infrastructure, he said.

QuikCycle, a Santa Clara, Calif. company that sells software for lab automation and test management, said it has changed its name from Lumenare Networks to QuikCycle.

QuikCycle also said it has raised a $8.9 million round of funding from the struggling venture capital firm, Crescendo Ventures.

The full announcement is here.

Blaze DFM, a Sunnyvale, Calif. maker of software for fabless semiconductor companies to give them greater control over manufacturing design and efficiency, has raised $10 million in venture capital.

It has also completed an acquisition of Aprio, a Santa Clara, Calif. company with operations in Japan and Taiwan that also provides semiconductor manufacturing design software.

From the announcement:

The combined company will continue on as Blaze DFM, Inc. New to the ranks of Blaze investors are El Dorado Ventures and Mobius Venture Capital, both of whom are previous investors in Aprio and are adding fresh capital to Blaze’s Series B round. Lightspeed Venture Partners, who led Blaze’s Series A funding [$6M], also participated in this latest round.

Blaze provides electrical DFM software solutions that maximize parametric yield for sub-100nm chips. Parametric failures – chips that fail to meet timing and power specs – have been described as the most critical yield-limiting factor facing designers today. Maximizing parametric yield has become the top priority at many of the largest chip companies worldwide.

The combination of Aprio’s litho simulation and analysis engines together with Blaze’s electrical analysis and optimization technology will result in the most comprehensive electrical DFM offering available from any commercial vendor.

The Aprio acquisition price was undisclosed. Aprio had raised at least $16 million, and was backed by Mobius and El Dorado as well. KT Venture Group and Goldman Sachs also invested.

LS9, a biofuel company based in San Carlos, Calif., has raised $5 million in a first round of funding from Khosla Ventures and Flagship Ventures, Venturewire reports today (subscription only).

We mentioned the LS9 backing last week, but the amount of backing wasn’t specified. The company develops biofuels that are similar to petroleum.

See our story here.

GSI Technology, the Santa Clara, Calif. company that offers static random access memory products for telecommunications equipment, said it plans to offer 8 million shares for between $6.50 and $8 per share.

Networking company Cisco Systems said it has agreed to buy NeoPath Networks for an undisclosed amount.

NeoPath, of Santa Clara, Calif., improves the performance of network storage systems.

Cisco was an investor in Neopath, along with venture capital firms August Capital, DCM-Doll Capital Management, Gabriel Venture Partners and Dot Edu Ventures. They invested more than $23 million.

Cisco is also a strategic partner of NeoPath.

Aragon Surgical, a Palo Alto, Calif. surgical device company, said it has acquired VeriSure, Inc., a privately held medical device company.

The acquisition amount was undisclosed. Aragon said the deal gives it ownership of the LapCapTM, a laparoscopic product that allows a surgeon to “more easily, rapidly, and predictably” pass a Veress needle into the peritoneal cavity in order to create a pneumoperitoneum (the gas-filled space in which the surgeon operates).

Aragon is backed by Onset Ventures.

Aragon apparently does not have a Web site.