Monthly Archives: July 2015

StrictlyVC: July 31, 2015

Happy last day of July, everyone! Hope you’re in for a wonderful weekend. Investor-writer Semil Shah continues to guide the vessel that is StrictlyVC while Connie takes some time offline to perfect her pool game. If you’d like to reach out to Semil, you can often find him on Twitter.

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Top News in the A.M.

LinkedIn reported second quarter earnings yesterday and sales were up — but not because of a recovery in its core business. The WSJ has more here.

Apple is moving into San Francisco, starting with 76,000 square feet in the city’s South of Market neighborhood.

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Musings on LPs and Direct Investments

By Semil Shah

In the few years I’ve been able to meet and learn from limited partners or LPs (those who invest in VC funds), I have noticed an increasing desire to co-invest alongside their general partners. This makes perfect sense. If I was an LP, I’d want to co-invest, as well. Yet, in the process of doing this over the past few years, I’ve found myself repeating some warnings to LPs who have grown eager to do co-invest at the very early stages of seed.

Typically, I cite three key warnings:

One, oftentimes the founders want to meet all potential investors who will be on their cap table. Even though a VC can offer syndication to the founder, that founder may not welcome the introduction and prefer to control the process him/herself. LPs can certainly ask for insight into a GP’s processes, policies, and histories around creating co-investment opportunities, but they cannot be guaranteed. Furthermore, what if a GP has two or three LPs interested in co-investing but there’s room for only one or two. How is the GP supposed to decide?

Two, when there is a real co-investment opportunity for an LP, sometimes the LP doesn’t have the proper resources at hand (domain knowledge, or network, etc.) to independently vet and diligence the specific deal in a few days. If the LP is a family office, they may have enjoy the latitude to quickly stress-test their network and then make a yes/no call; if the LP is a fund of funds managing other institutions’ money, they may have an incentive to seek these types of deals out given their fund economics, regardless of engaging in proper diligence.

And, three, whenever someone is the recipient of an investment opportunity, one should ask: “Why I am so lucky?” In a competitive deal, I often have to fight just to wedge in, and I am not always successful. These are the investments LPs would love to participate in directly as a co-investor, but such opportunities rarely surface. Yes, there are companies that go unnoticed for months or years before breaking out and becoming a sensation, but those aren’t a monthly occurrence.

Again, if I was an LP, I would want to co-invest. After all, LPs are looking for outsize returns, just like the rest of us. More, if an LP doesn’t get in at seed, the bigger VC firms won’t create room for the LP down the road. Still, I’d welcome more conversation and debate around this topic, both from GPs and LPs alike, so that we can all learn more about best practices learned and minefields to avoid. Dangling the opportunity to co-invest may help ink a commitment, but in practice, all that glitters may not be gold.

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New Fundings

Behalf, a 3.5-year-old, New York-based online lending startup that makes short-term loans to small businesses, has raised $119 million in equity and a credit facility. Victory Park Capital has provided the credit line; MissionOG led the Series B round, with participation from Maverick Ventures and earlier backers Spark Capital and Sequoia Capital. Venture Capital Dispatch has more here.

Catawiki, the seven-year-old Amsterdam-based online auction house, has raised $75 million in Series C funding led by Lead Edge Capital, with participation from Accel Partners and Project A Ventures. Several Booking.com executives, including former CMO Arthur Kosten, also joined the round. VentureBeat has more here.

Future Home, a 2.5-year-old, Rogaland, Norway-based maker of a connected home app, has raised $1.4 million in seed funding led by Ståle Kyllingstad from IKM Invest, with participation from iPark, Ålgård Holding, and other individual investors. ArcticStartup has more here.

Jiuxian, a six-year-old, Beijing, China-based alcoholic beverage e-commerce company, has raised $80 million in new funding from undisclosed Chinese investors, according to Chinese media reports. The company had previously raised $150 million from investors, including Rich Land Capital, Oriental Fortune Capital and Sequoia Capital. More here.

Light, a two-year-old, Palo Alto, Ca.-based company behind a high-quality smartphone camera, has raised $25 million in Series B funding led byFormation 8 Hardware Fund. Additional participants in the round include StepStone Group, Bessemer Venture Partners, CRV, Foxconn’s FIH Mobile, former Motorola Mobility CEO Sanjay Jha and CrunchFund. The company has now raised at least $35 million to date. VentureBeat has more here.

Tripfactory, a 1.5-year-old, Bangalore, India-based online marketplace that offers customized trip planning and packages to users, has raised an undisclosed amount of Series A funding from Aarin Capital Partners. The Economic Times has more here.

TytoCare, a four-year-old, Israel-based telehealth platform that enables patients to perform home medical examinations and consult with a remote clinician, has raised $11 million in Series B funding led by Cambia Health Solutions. Others of its backers include OrbiMed Advisors, WalgreensFosun Pharma and LionBird. More here.

Ubox, a five-year-old, Beijing, China-based vending machine company with growing market share, has collected $85 million from the Carlyle Group in exchange for an undisclosed stake. TechNode has more here.

WEVR, a 6.5-year-old, L.A.-based virtual reality community and technology platform, has received $10 million from HTC — the smartphone maker that more recently branced into wearable devices and the virtual reality category — in exchange for a 15 percent stake in the company. More here.

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New Funds

Foundry Group, the 10-year-old, Boulder, Co.-based venture firm, has closed its fifth fund with $225 million, the same size of its last two early-stage funds, which were raised in 2012 and 2010, respectively.

NewSchools Venture Fund has launched an ed tech accelerator with a focus on science learning. TechCrunch has more here.

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Jobs

S3 Ventures, an eight-year-old, Austin, Tex.-based venture firm, is looking to hire a pre-MBA associate.

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Data

CB Insights looks at the venture firms that are consistently involved in the largest tech exits.

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Essential Reads

Google is quietly distributing a new version of its Glass wearable computer aimed at businesses.

Pinterest just became the first Silicon Valley company to publicly establish its diversity goals.

Uber is set to pour $1 billion into India, placing its business development efforts in the country on a par with China and signaling an escalation of its rivalry with domestic ride-sharing Ola.

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Detours

Unwrapping the “Happy Birthday” legal dispute.

Tom Cruise’s 10 greatest movie stunts, reviewed by a stuntman.

The really big one. (Gulp.)

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Retail Therapy

Cool camera bag.




Musings on LPs and Direct Investments

money-copy-4-300x217By Semil Shah

In the few years I’ve been able to meet and learn from limited partners or LPs (those who invest in VC funds), I have noticed an increasing desire to co-invest alongside their general partners. This makes perfect sense. If I was an LP, I’d want to co-invest, as well. Yet, in the process of doing this over the past few years, I’ve found myself repeating some warnings to LPs who have grown eager to do co-invest at the very early stages of seed.

Typically, I cite three key warnings:

One, oftentimes the founders want to meet all potential investors who will be on their cap table. Even though a VC can offer syndication to the founder, that founder may not welcome the introduction and prefer to control the process him/herself. LPs can certainly ask for insight into a GP’s processes, policies, and histories around creating co-investment opportunities, but they cannot be guaranteed. Furthermore, what if a GP has two or three LPs interested in co-investing but there’s room for only one or two. How is the GP supposed to decide?

Two, when there is a real co-investment opportunity for an LP, sometimes the LP doesn’t have the proper resources at hand (domain knowledge, or network, etc.) to independently vet and diligence the specific deal in a few days. If the LP is a family office, they may have enjoy the latitude to quickly stress-test their network and then make a yes/no call; if the LP is a fund of funds managing other institutions’ money, they may have an incentive to seek these types of deals out given their fund economics, regardless of engaging in proper diligence.

And, three, whenever someone is the recipient of an investment opportunity, one should ask: “Why I am so lucky?” In a competitive deal, I often have to fight just to wedge in, and I am not always successful. These are the investments LPs would love to participate in directly as a co-investor, but such opportunities rarely surface. Yes, there are companies that go unnoticed for months or years before breaking out and becoming a sensation, but those aren’t a monthly occurrence.

Again, if I was an LP, I would want to co-invest. After all, LPs are looking for outsize returns, just like the rest of us. More, if an LP doesn’t get in at seed, the bigger VC firms won’t create room for the LP down the road. Still, I’d welcome more conversation and debate around this topic, both from GPs and LPs alike, so that we can all learn more about best practices learned and minefields to avoid. Dangling the opportunity to co-invest may help ink a commitment, but in practice, all that glitters may not be gold.




StrictlyVC: July 30, 2015

Happy Thursday, everyone! Investor-writer Semil Shah is in charge this week while Connie is working on some sort of sand castle, we want to call it, down at the beach. If you’d like to reach out to Semil with questions or comments, you can usually find him on Twitter.

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Top News in the A.M.

The venture firm First Round Capital, which celebrates its 10th anniversary this year, sat down with its vast troves of proprietary data, producing 10 very interesting findings, including that company alma maters matter far more than schools (though the two are invariably intertwined), and that female founders outperform their male peers. If you’ve missed the report, it’s here.

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Leo Polovets on Branding, Data, and One Funky New Trend

By Semil Shah

In recent years, Leo Polovets has been busily building a brand for himself as one of four partners at Susa Ventures, a young, San Francisco-based venture firm that’s focused on data. Polovets — who most recently worked a senior software engineer at the L.A.-based global location data company Factual and before that, as a software engineer at Google (and who, earlier in his career, was the second non-founding engineer at LinkedIn) — has made meaningful strides toward that end, too. Actively blogging smart observations has helped. We caught up with Polovets recently to learn more.

Seed stage valuations — stable, going up, returning to earth?

Valuations have felt fairly stable over the last year. The one change I’ve seen is strong-but-not-spectacular founding teams that have built a [minimum viable product] in four to eight weeks and are trying to fundraise at high ($7 million-plus) caps. To me, that feels like way too high of a valuation for a month or two of work. I didn’t see this pattern 12 to 24 months ago, but I’ve seen it about a dozen times in the last six months.

Without much M&A these days, how does Susa think about exit profiles and returning a fund when liquidity is rare?

We think about it a bit, but it’s a lower priority concern — at least for now. First, I think seed funds have more opportunities to sell stock in later funding rounds. It’s probably much easier for us to sell some seed stock during a Series C than it is for a Series D investor to sell their stock in a Series E. Second, I think this is an area where the market will likely figure something out. If there’s a true liquidity crunch, someone will come up with a transferable financial instrument, or a fund that buys out seed fund stakes, or something else that will address the problem. Finally, I think it’s hard to predict how liquidity will look in 5 or 10 years, which is when funds that started in the last few years will be reaching their conclusion.

You’re quite active on Quora. Are founders reaching out to you via that network?

I’ve had a few founders reach out to me on Quora, but not many — perhaps one founder every few months. My blog has turned out to be a much better source of deal flow. I get three to ten leads from that every month.

I think the real value of blogging/tweeting/writing on Quora is less about explicit deal flow and more about creating a brand. Folks like you and Tomasz Tunguz and Jason Lemkin have done a great job in this department. As capital becomes more commoditized, especially at the seed stage, it becomes more important for investors to stand out from the crowd. My sense is that five years ago, having strong deal flow was one of the keys to being a great seed investor; now it’s more about getting an allocation in oversubscribed rounds — and a big part of that is just having people know who you are.

Susa focuses on companies who create data moats. In a world where downstream investors want to see revenue, what’s the appetite for data startups that will take time to make money?

The nice thing about data moats is that they’re usually built up as a side effect of growth and revenue, so monetization doesn’t need to be deferred. For example, if a startup is building an accounting tool, and the expense data being collected can be used in interesting ways, the founders are not going to say, “Ok, we need to make the product free so that we can collect more data.” Instead, they’re going to keep iterating on the product, improving the onboarding, exploring new growth channels, and so on. More and more people will find the product, use it, love it, and pay for it, and as a side effect the data moat will become stronger.

One angle to data that I think is interesting is that it can provide some downside protection. VCs and founders generally swing for the fences, but it’s nice to know there are some exit options if a company’s plans don’t pan out. For products with a strong team, potential acquihires from companies like Google provide some downside protection. For products with network effects, sometimes an acquirer will want to buy a failing company just to get access to its customers and network. I think data moats can provide another acquisition asset, because data can have a lot of value to the right buyer.

Finally, I think having data moats provides great optionality for companies and, by extension, for investors. Having a data moat makes it easier to defer revenue if desired because focusing on growth increases the strength of the moat faster, but it also makes it easier to start charging because having a data moat and features/products built on top of that data creates a lot more stickiness and lock-in — and fewer alternatives for customers who are reluctant to pay.

Securing Series A funding is much harder these days. As a seed investor, what do you coach your founders to anticipate?

My main pieces of advice are: 1.) Budget four to six months of runway to raise a Series A. If you need 12 months to hit good metrics, raise enough capital for 16 to 18 months so that you have time to raise money at the end. 2.) Budget time for hires to become effective. If enterprise sales will take six months to close, and you have to raise more capital in 12 months, then it’s probably pointless to hire salespeople in month eight. Hire a salesperson in month five or raise more runway in the first place.3.) Figure out what milestones you want to hit for your next round and work backward to figure out how much you need to raise. For example, for most SaaS companies, $1 million [in annual recurring revenue, or ARR] is the minimum viable revenue for a Series A. When deciding how much to raise, figure out how much capital you need to get to $1 million ARR; don’t just pick an amount to raise because it sounds reasonable or because it’s how much your friends raised. 4.) Don’t let money in the bank tempt you into spending faster than you should. Spend as slowly as possible until you’ve found product/market fit.
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New Fundings

Droom, a year-old, Gurgaon, India-based online used car marketplace, has raised $16 million in funding led by the Mumbai-based venture firm LightBox Ventures and the Japanese internet firm Beenos. Inc42 has more here.

FreedomPop, the four-year-old, L.A.-based U.S. wireless carrier startup that has been building a business based on completely free voice and data services, has raised $10 million in funding from two strategic investors: the pan-Asian mobile carrier Axiata and an unnamed U.S. tech investor. The company has now raised $59.3 million altogether, shows Crunchbase. TechCrunch has more here.

G2 Crowd, a three-year-old, Highland Park, Il.-based platform for users to share reviews about specialized business software, has raised $7 million in Series A funding led by Pritzker Group Venture Capital, with “significant participation” from earlier backers Chicago Ventures, Hyde Park Venture Partners, company chairman Godard Abel, and G2 Crowd’s own executives. Business Insider has more here.

GitHub, the seven-year-old, San Francisco-based company that says it hosts the largest community of software developers and projects on the web, has raised $250 million at a $2 billion valuation led by Sequoia Capital. Other participants in the Series B round include Institutional Venture PartnersThrive Capital and Andreessen Horowitz, which had provided GitHub with$100 million in Series A funding back in 2012. Venture Capital Dispatch hasmore here.

GoButler, a months-old, New York-based startup that promises users access to its staff of “Heros,” who act as personal assistants, has raised $8 million in Series A funding led by General Catalyst Partners, with participation from Lakestar, Rocket Internet’s Global Founders Capital, Slow VenturesBoxGroup, Sound Ventures, and Cherry Ventures. TechCrunch has more here.

PicMonkey, a three-year-old, Seattle-based photo editing web app, has raised a whopping $41 million in growth equity investment (its first institutional round) from Spectrum Equity. TechCrunch has more here.

Seedrs, a six-year-old, London-based equity crowdfunding platform, has raised a $15.6 million (£10 million) Series A round led by Woodford Patient Capital Trust and Augmentum Capital. Seedrs had previously raised $7.2 million from Faber Ventures and its own crowdfunding campaign. More here.

Tictail, a three-year-old, New York-based platform that  helps retailers set-up commerce stores and combines the brands into a single, unified marketplace, has raised $22 million from earlier backers, including Creandum, Thrive Capital, Balderton Capital and Acton Capital. TechCrunch has more here.

Thrive Market, a two-year-old, L.A-based company that sells users $60 annual memberships to shop for healthful products, has raised $30 million in Series A funding led by Greycroft Partners, with participation from Scripps NetworkCAVU, Powerplant Ventures, and celebrity investors, including Justin Timberlake, Toby McGuire, and Demi Moore. TechCrunch has more here.

Truecaller, a six-year-old, Stockholm, Sweden-based company whose caller ID app let’s users see who is calling and to block calls, is looking to raise around $100 million at a $1 billion valuation, reports TechCrunch, which says Morgan Stanley has been hired to lead the process. To date, the company has raised $80 million, shows Crunchbase. Its backers include Atomico, Kleiner Perkins Caufield & Byers, Sequoia Capital, Access Partners and Open Ocean. TechCrunch has the scoop here.

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People

Sandi MacPherson, founder of the social network Quibb, has launched an initiative that asks conference organizers to ensure that half their panelists are female speakers. She has a growing list of 1,100 women leaders at companies like Google, Facebook, PayPal, and Shopify to make it easier for them, too. Fast Company has more here.

A new app lets anyone with a startup idea instantly chat with Kleiner Perkins Caufield & Byer‘s newest investors.

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Jobs

Airbus Group, Europe’s largest aerospace company, is looking to add an investment analyst to its newly formed corporate venture fund. The job is in Palo Alto, Ca.

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Essential Reads

The Supreme Court decision about which every startup should know.

Facebook’s cash cow: Mobile.

Yelp is in a “death spiral” says tech investor Eric Jackson. (He points, in part, to the decision of entrepreneur Max Levchin to step down as chairman of the company as proof.)

Uber is now leasing cars to its drivers through its own subsidiary.
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Detours

The growing wealth gap that no one is talking about.

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Retail Therapy

Nerf, we like you as much as the next person, but 70 miles per hour? Let’s maybe chillax a little bit.




Leo Polovets on Branding, Data, and One Funky New Trend

1b7cc97By Semil Shah

In recent years, Leo Polovets has been busily building a brand for himself as one of four partners at Susa Ventures, a young, San Francisco-based venture firm that’s focused on data. Polovets — who most recently worked a senior software engineer at the L.A.-based global location data company Factual and before that, as a software engineer at Google (and who, earlier in his career, was the second non-founding engineer at LinkedIn) — has made meaningful strides toward that end, too. Actively blogging smart observations has helped. We caught up with Polovets recently to learn more.

Seed stage valuations — stable, going up, returning to earth?

Valuations have felt fairly stable over the last year. The one change I’ve seen is strong-but-not-spectacular founding teams that have built a [minimum viable product] in four to eight weeks and are trying to fundraise at high ($7 million-plus) caps. To me, that feels like way too high of a valuation for a month or two of work. I didn’t see this pattern 12 to 24 months ago, but I’ve seen it about a dozen times in the last six months.

Without much M&A these days, how does Susa think about exit profiles and returning a fund when liquidity is rare?

We think about it a bit, but it’s a lower priority concern — at least for now. First, I think seed funds have more opportunities to sell stock in later funding rounds. It’s probably much easier for us to sell some seed stock during a Series C than it is for a Series D investor to sell their stock in a Series E. Second, I think this is an area where the market will likely figure something out. If there’s a true liquidity crunch, someone will come up with a transferable financial instrument, or a fund that buys out seed fund stakes, or something else that will address the problem. Finally, I think it’s hard to predict how liquidity will look in 5 or 10 years, which is when funds that started in the last few years will be reaching their conclusion.

You’re quite active on Quora. Are founders reaching out to you via that network?

I’ve had a few founders reach out to me on Quora, but not many — perhaps one founder every few months. My blog has turned out to be a much better source of deal flow. I get three to ten leads from that every month.

I think the real value of blogging/tweeting/writing on Quora is less about explicit deal flow and more about creating a brand. Folks like you and Tomasz Tunguz and Jason Lemkin have done a great job in this department. As capital becomes more commoditized, especially at the seed stage, it becomes more important for investors to stand out from the crowd. My sense is that five years ago, having strong deal flow was one of the keys to being a great seed investor; now it’s more about getting an allocation in oversubscribed rounds — and a big part of that is just having people know who you are.

Susa focuses on companies who create data moats. In a world where downstream investors want to see revenue, what’s the appetite for data startups that will take time to make money?

The nice thing about data moats is that they’re usually built up as a side effect of growth and revenue, so monetization doesn’t need to be deferred. For example, if a startup is building an accounting tool, and the expense data being collected can be used in interesting ways, the founders are not going to say, “Ok, we need to make the product free so that we can collect more data.” Instead, they’re going to keep iterating on the product, improving the onboarding, exploring new growth channels, and so on. More and more people will find the product, use it, love it, and pay for it, and as a side effect the data moat will become stronger.

One angle to data that I think is interesting is that it can provide some downside protection. VCs and founders generally swing for the fences, but it’s nice to know there are some exit options if a company’s plans don’t pan out. For products with a strong team, potential acquihires from companies like Google provide some downside protection. For products with network effects, sometimes an acquirer will want to buy a failing company just to get access to its customers and network. I think data moats can provide another acquisition asset, because data can have a lot of value to the right buyer.

Finally, I think having data moats provides great optionality for companies and, by extension, for investors. Having a data moat makes it easier to defer revenue if desired because focusing on growth increases the strength of the moat faster, but it also makes it easier to start charging because having a data moat and features/products built on top of that data creates a lot more stickiness and lock-in — and fewer alternatives for customers who are reluctant to pay.

Securing Series A funding is much harder these days. As a seed investor, what do you coach your founders to anticipate?

My main pieces of advice are: 1.) Budget four to six months of runway to raise a Series A. If you need 12 months to hit good metrics, raise enough capital for 16 to 18 months so that you have time to raise money at the end. 2.) Budget time for hires to become effective. If enterprise sales will take six months to close, and you have to raise more capital in 12 months, then it’s probably pointless to hire salespeople in month eight. Hire a salesperson in month five or raise more runway in the first place.3.) Figure out what milestones you want to hit for your next round and work backward to figure out how much you need to raise. For example, for most SaaS companies, $1 million [in annual recurring revenue, or ARR] is the minimum viable revenue for a Series A. When deciding how much to raise, figure out how much capital you need to get to $1 million ARR; don’t just pick an amount to raise because it sounds reasonable or because it’s how much your friends raised. 4.) Don’t let money in the bank tempt you into spending faster than you should. Spend as slowly as possible until you’ve found product/market fit.




StrictlyVC: July 29, 2015

Happy Wednesday, everyone! Investor-writer Semil Shah is in charge this week while Connie is offline, working on her comically bad golf swing. If you need anything or just want to compliment Semil’s investing acumen, he can find him on Twitter.

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Top News in the A.M.

Yelp reported its second-quarter earnings yesterday and shareholders did not like what the company had to say.

Twitter also reported second quarter earnings yesterday. The good news: its revenue is up. The bad: user growth remains stagnant. More here.

The China-based hackers who stole data on tens of millions of U.S. insurance holders and government employees in recent months breached another big target at around the same time — United Airlines, Bloomberg is reporting this morning. The previously unreported breach raises the possibility that the hackers now have data on the movements of millions of Americans — and that the 10 companies and organizations the group has hacked aren’t some random assembly. Much more here.

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Quick Chat with Jed Katz of Javelin Venture Partners

By Semil Shah

Javelin Venture Partners emerged on the scene roughly six years ago, with a $75 million fund. Led by Noah Doyle and Jed Katz, the entrepreneurs, investors, and business school friends haven’t veered far from their starting team or their original mandate, either. We recently caught up with Katz to talk about it. Our chat has been edited for length.

You started the firm with Noah and added a new general partner a few years ago without dramatically increasing your fund size. Was that your plan all along?

We were always open to a third partner but brought one on a bit quicker than we’d expected, mostly because Alex Gurevich turned out to be such a great addition to the team. Our funds have all remained in the $100 million to $125 million range, though we’re now on Fund III, so there’s more capital per partner to manage.

There seem to be two types of Series As right now — smaller ones and huge ones. For a smaller Series A — the types Javelin likes — what are you looking for broadly?

We believe in a smooth fundraising cadence for companies, where enough Series A capital is raised to make real progress, hit important milestones, expand the team with A players, and demonstrate the potential for explosive growth, but not so much capital that you have to get virtually everything right to grow into an already high valuation in order to raise that next round.  Some of the very best companies took some time and made a few pivots to find their fast-growth path and could have easily died along the way if their early valuations were too high.

We typically invest between $3 million and $5 million in our Series A rounds in companies that we feel have great founders, highly scalable and capital efficient models, sustainable competitive advantages, an ability to get to $100 million in revenue in a reasonable amount of time and that are creating substantial strategic value beyond just their revenue stream.  We also look for things where our operational backgrounds can lead to meaningful help in building the business.

Is there a temptation to dabble into seed while having a mid-sized fund?

Every day.  There are so many great concepts being developed, it can be damn tempting to invest in a bunch of them.  This has to be the greatest period ever for being an angel investor. We have a rule of thumb when it comes to our seed investments, though.  We only do if it we’re very confident – even at this early stage – that we want to do the A round too, and we save reserves accordingly.  We hate the signaling issue for entrepreneurs when their VC seed investors don’t do the A rounds, so we really try to avoid that.  Also, even seed deals take a lot of our time since we tend to be very involved partners, so we end up only doing a few seed deals a year.

For your companies which raise follow-on rounds, are you finding it easy to invest with pro-rata or super pro-rata?

Yes, that’s never been a problem.  Even in the later stage rounds, we will sometimes do an [special-purpose vehicle] to maintain our stake.

If you could change one thing about today’s seed ecosystem as a Series A investor, what would it be and why?

Some of the seed valuations, or the caps on the notes, are simply way too high, and they get the entrepreneurs — and their employees — into both a terrible mindset and a very dangerous fundraising cadence, turning off potential investors that may have been their perfect partner.  A lot has been written about that problem, and we see it firsthand almost every week.  With that said, I’m certainly glad that there’s so much seed financing right now. That creates great deal flow for us, and it helps get the companies further along so that we have much more signal when we dig in.

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New Fundings

Acrobatiq, a two-year-old, Pittsburgh, Pa.-based maker of adaptive courseware and data analytics for personalized learning, has raised $9.75 million in Series A funding from Draper Triangle Ventures, Hearst Ventures, and the Bill & Melinda Gates Foundation, with participation from earlier backer Carnegie Innovations, a subsidiary of Carnegie Mellon.

AirMap, an eight-month-old, Santa Monica, Ca.-based company whose software and systems help drone operators fly only where they’re allowed, has raised $2.6 million in seed funding led by Lux Capital, with participation fromSocial+Capital Partnership, Bullpen Capital, TenOneTen Ventures,Legend Star, and Haystack. Venture Capital Dispatch has more here.

AltspaceVR, a two-year-old, Redwood City, Ca.-based virtual reality chat room and communication platform, has raised $10.3 million in Series A funding from Comcast Ventures, as well as returning investors Tencent HoldingsDolby Family Ventures, The Raine Group, Lux Capital, Western Technology Investments, Maven Ventures, Promus VenturesStreamlined Ventures, and Rothenberg Ventures. The company has now raised $15.7 million altogether. TechCrunch has more here.

Cylance, a three-year-old, Irvine, Ca.-based security startup rooted in artificial intelligence, has raised $42 million led by venture capital firm DFJ Growth, with participation from KKR, Dell Ventures, CapitalOne Ventures and TenEleven Ventures, among others. The round pushes the company’s total funding to $77 million, reports Fortune.

Flipkart, the eight-year-old, Bangalore, India-based e-commerce giant, has closed on $700 million in funding at a valuation of $15 billion from investors that include Tiger Global Management and existing backers, including Steadview Capital. The Economic Times has the story here.

Little, a new, Bangalore, India-based app-only marketplace that connects consumers with physical retailers via their smartphones, has raised $50 million in funding led by the Indian payment and commerce firm Paytm. SAIF Partners and Tiger Global Management also participated in the fundraising. TechCrunch has much more here.

Occipital, a seven-year-old, Boulder, Co.-based software startup that develops mobile computer vision applications, has raised $13 million in Series B funding from Intel Capital, Shea Ventures, and Grishin Robotics, along with earlier backer Foundry Group. The company has now raised roughly $21 million altogether, shows Crunchbase. More here.

PushSpring, a two-year-old, Seattle-based company that promises device-level ad targeting data for iOS and Android mobile app users, has raised $5 million in Series A funding led by Trilogy Equity Partners. The company has now raised $6.5 million altogether. The Seattle Times has more here.

Radius, a six-year-old, San Francisco-based predictive marketing company, has raised $50 million in new funding led by Founders Fund, with participation from Formation 8, Glynn Capital Management, AME Cloud VenturesSalesforce Ventures, BlueRun Ventures, and Yuan Capital.  The company has now raised $125 million altogether. Fortune has more here.

Tripping, a five-year-old, San Francisco-based search engine for long-term rental properties, has raised $16 million in Series B funding led by Steadfast Venture Capital, with participation from 7 Seas Venture Partners, Enspire Capital and Azure Capital, along with a handful of angels, including former Expedia CEO Erik Blachford. TechCrunch has more here.

Twilio, the seven-year-old, San Francisco-based cloud-based communication service provider, has raised a fresh $130 million in Series E funding led by Fidelity and T. Rowe Price, with participation from Altimeter Capital Management, Arrowpoint Partners, Amazon and Salesforce Ventures. Fortune has more here.

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New Funds

Golden Gate Ventures, a three-year-old, Singapore-based venture firm, just announced its second, $50 million fund to support startups in the region and international companies looking to move there. The firm’s LP’s include the Singaporean government fund Temasek; Monitor Capital Partners in Europe; Facebook co-founder Eduardo Saverin; and Naver, the Korean company behind messaging app Line. Much more here.

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IPOs

Non-VC or crossover investors are helping drive the rebound in IPOs among healthcare companies, and it’s proving to be a winning strategy.

—–

Exits

Legacy Republic, which is building a freelance workforce to help families digitize their photos and videos, just acquired competitor Yarly, a three-year-old, New York-based startup. Terms of the deal were not disclosed. Yarly doesn’t appear to have raised institutional funding. Legacy Video is a subsidiary of 16-year-old YesVideo, a Santa Clara, Ca.-based company that has raised $31 million from undisclosed investors over the years, according to Crunchbase. TechCrunch has more here.

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People

Hope Edward Snowden is enjoying Moscow. Yesterday, the White Housedismissed a nearly two-year-old petition asking for his pardon.

Two Twitter employees announced their departures right before the company’s second-quarter earnings announcement today. The first, Christian Oestlien, was a VP of product management focused on growth. Oestlien, who came from Google and spent roughly two years at Twitter, tweeted that he’s joining YouTube. Meanwhile, product director Todd Jackson, who has been focused on discovery and came to Twitter via the acqusition of his company, Cover, is also out the door, tweeting yesterday he’s joining Dropbox as its head of product. TechCrunch has more here.

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Jobs

Wedbush Securities is looking to hire an equity research associate. Looks like the job could be in L.A., San Francisco, or New York.

Square is looking to hire a new head of corporate communications. The job is in San Francisco.

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Essential Reads

Alibaba Group is pouring another $1 billion into Aliyun, its cloud computing unit. The idea is to expand Aliyun, which currently has data centers in China, Hong Kong, and Silicon Valley, into other international markets (and, presumably, to compete more directly with Amazon Web Services).

According to eMarketer, Instagram will surpass Google (and Twitter) in U.S. mobile display ad revenues by 2017.

Quiz time: How many times has your personal information been exposed to hackers?

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Detours

Interplanetary travel could be closer than we think. Scientists just confirmed that an electromagnetic propulsion drive, which is fast enough to get to the moon in four hours, actually works.

Why your dog smells so foul when wet.

What you don’t know and might be interested to learn about the very funny 35-year-old movie “Airplane!”

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Retail Therapy

A former church in London. Suggested donation: $15.6 million.




Quick Chat with Jed Katz of Javelin Venture Partners

Jed KatzJavelin Venture Partners emerged on the scene roughly six years ago, with a $75 million fund. Led by Noah Doyle and Jed Katz, the entrepreneurs, investors, and business school friends haven’t veered far from their starting team or their original mandate, either. We recently caught up with Katz to talk about it. Our chat has been edited for length.

You started the firm with Noah and added a new general partner a few years ago without dramatically increasing your fund size. Was that your plan all along?

We were always open to a third partner but brought one on a bit quicker than we’d expected, mostly because Alex Gurevich turned out to be such a great addition to the team. Our funds have all remained in the $100 million to $125 million range, though we’re now on Fund III, so there’s more capital per partner to manage.

There seem to be two types of Series As right now — smaller ones and huge ones. For a smaller Series A — the types Javelin likes — what are you looking for broadly?

We believe in a smooth fundraising cadence for companies, where enough Series A capital is raised to make real progress, hit important milestones, expand the team with A players, and demonstrate the potential for explosive growth, but not so much capital that you have to get virtually everything right to grow into an already high valuation in order to raise that next round.  Some of the very best companies took some time and made a few pivots to find their fast-growth path and could have easily died along the way if their early valuations were too high.

We typically invest between $3 million and $5 million in our Series A rounds in companies that we feel have great founders, highly scalable and capital efficient models, sustainable competitive advantages, an ability to get to $100 million in revenue in a reasonable amount of time and that are creating substantial strategic value beyond just their revenue stream.  We also look for things where our operational backgrounds can lead to meaningful help in building the business.

Is there a temptation to dabble into seed while having a mid-sized fund?

Every day. There are so many great concepts being developed, it can be damn tempting to invest in a bunch of them.  This has to be the greatest period ever for being an angel investor. We have a rule of thumb when it comes to our seed investments, though.  We only do if it we’re very confident – even at this early stage – that we want to do the A round too, and we save reserves accordingly.  We hate the signaling issue for entrepreneurs when their VC seed investors don’t do the A rounds, so we really try to avoid that.  Also, even seed deals take a lot of our time since we tend to be very involved partners, so we end up only doing a few seed deals a year.

For your companies which raise follow-on rounds, are you finding it easy to invest with pro-rata or super pro-rata?

Yes, that’s never been a problem.  Even in the later stage rounds, we will sometimes do an [special-purpose vehicle] to maintain our stake.

If you could change one thing about today’s seed ecosystem as a Series A investor, what would it be and why?

Some of the seed valuations, or the caps on the notes, are simply way too high, and they get the entrepreneurs — and their employees — into both a terrible mindset and a very dangerous fundraising cadence, turning off potential investors that may have been their perfect partner.  A lot has been written about that problem, and we see it firsthand almost every week.  With that said, I’m certainly glad that there’s so much seed financing right now. That creates great deal flow for us, and it helps get the companies further along so that we have much more signal when we dig in.




StrictlyVC: July 28, 2015

Hi, good morning, everyone! Talented investor-writer Semil Shah is in charge of our columns for a few weeks, as Connie catches up on her reading. If you’re interested in reaching out to Semil, you can find him on Twitter at @semil.

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Top News in the A.M.

Remember Product Hunt? (We featured it yesterday.) Today, Amazon is taking the startup Launchpad.

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Quick Chat with Scalus Founder and CEO Kristen Koh Goldstein

Scalus, a five-year-old, San Francisco-based maker of workflow and collaboration software, was born out of necessity, says founder and CEO, Kristen Koh Goldstein, a former investment banking analyst turned entrepreneur. We recently caught up with her to learn more.

With Scalus and a company you founded previously, BackOps, you seem to have developed a passion and expertise around building software and networks for remote workers — how did that all come to be?

It’s fueled from a place of personal experience. After 9/11, I left Wall Street to learn operational finance and accounting at startups. Then life happened. I became a mom.  And I learned firsthand the challenges of being a mom and a professional. So I started BackOps, a back office service employing skilled moms who work from home between school dropoff and pickup.  The business grew quickly, doubling revenue every year for four years, so we ended up needing to develop software to clear the hurdles to scaling our business and Scalus was born.

Our corporate mission is to prove that the future of work includes workplace flexibility for all.  Our social mission is to get a million parents back to work by empowering them to be productive at work and engaged at home.

Speaking of remote workers, some of them are likely to be on contract. Have you been following the contractor versus full-employee debate as it relates to the on-demand sector? Any reactions?  

The labor laws haven’t caught up with the changing face of the workforce. The Millennial generation approaches employment differently than its predecessors. Companies look more like Hollywood productions or real estate development projects. The line between “internal” and “external” becomes much more blurred in this environment, where contractors can often have the same longevity and close working relationships as internal employees, especially across departments.

Philosophically, I believe it’s important to make a commitment to people who commit to you.  At BackOps, where I’m the chairwoman, my perspective has always been that unless you have an active income source elsewhere (you’re working for others), you are an employee of the company, even if just part-time on a temporary basis.<

What’s your point of view on the increased attention paid to having more women in VC and investing roles in the Valley? Are there more women quietly doing this than we know about, or is it still pretty dismal? If so, what can change it quickly?

In angel investing, there have always been a lot of women funding and supporting early-stage companies. Shawn Byers, a prolific investor in female-led companies, is probably the only member of her family [which includes her husband, Brook Byers of Kleiner Perkins and their sons Blake Byers of Google Ventures and Chad Byers of Susa Ventures] who you haven’t heard about.  I think it’s quite possible that Shawn may end up backing just as many startups as Brook, Blake, and Chad. Full disclosure: Blake Byers is our biggest champion at Google Ventures, so we’re a big fan of the whole Byers clan.

I am thrilled that trailblazers, including Helena Morrissey and Sukhinder Singh Cassidy, are pushing forward the discussion about getting more women in the boardroom, which is a positive change toward getting more women in VC. I am also so grateful to the countless women quietly working behind the scenes, including Aileen Lee. Hopefully, more companies, especially startups where like-think reigns, will start diversifying their boards, which will increase the demand for female VCs, who will in turn invest in a broader range of founders who will seek diverse boards.

You’re an active angel and seed investor but keep a relatively low profile. Is that on purpose or all part of the plan?

It’s on purpose. I have been listening, learning, and waiting for the remote worker movement to come center stage. When the time is right to talk about what it means to empower everyone across an organization to determine the way that they work, you’ll hear a lot more from me.

—–

New Fundings

Castle Biosciences, a seven-year-old, Friendswood, Tex.-based molecular diagnostics firm, has raised $11.7 million in the first tranche of a Series F round that’s targeting $20 million. Industry Ventures led the financing, with participation from earlier backers HealthQuest Capital and Mountain Group Partners.

More here.China Rapid Finance, a 14-year-old, Shanghai, China-based online consumer lending marketplace serving online users and China’s emerging middle class, has raised $35 million in Series C funding led by Broadline Capital, a global private equity firm, with the participation of an unnamed family office and other investors. The company has now raised at least $56 million, shows Crunchbase. More on the company here.

Deliveroo, a three-year-old, London-based on-demand startup that offers food delivery from high-end restaurants that don’t traditionally offer a take-out service, has raised $70 million in Series C funding led by Greenoaks Capital and Index Ventures, with participation from earlier backers Accel Partnersand Hoxton Ventures. The company has now raised roughly $100 million altogether. TechCrunch has more here.

Kareo, an 11-year-old, Irvine, Ca.-based startup that provides small medical practices with tools they need to run their businesses, has raised $55 million in new funding led by the late-stage health tech fund Montreux Equity Partners, with participation from Silver Lake Waterman and all previous investors, including Greenspring Associates, OpenView Venture Partners, and Stripes Group. TechCrunch has more here.

Lecorpio, a nine-year-old, Freemont, Ca.-based company that sells software for managing intellectual property portfolios, has raised $15 million in Series B funding led by  M2OMore here.

MacroFab, a nearly two-year-old, Houston, Tex.-based platform that helps hardware startups prototype and manufacture PCB boards, has raised $2 million in seed funding led by Techstars Ventures. The company has now raised $2.7 million altogether, shows Crunchbase. More here.

Mobi, a seven-year-old Indianapolis, In.-based company whose cloud-based software centralizes the management of mobile devices by integrating with wireless carriers, corporate IT systems and more, has raised $35 million in funding from the growth equity firm Bregal Sagemount.

Oncobiologics, a four-year-old, Cranbury, N.J.-based biopharmaceutical company, has raised $31 million in new funding led by Perceptive Advisors, with participation from earlier backers, including Cormorant Global Healthcare Master Fund, Longwood Capital Partners, and venBio Select Fund. Other investors included Proximare Lifesciences Fund, OSSB Pharma Fund and MIH Fund.

Optoro, an 11-year-old, Lanham, Md.-based re-seller of unwanted retail goods that counts Kleiner Perkins Caufield & Byers and Revolution among its investors, has raised $40 million in debt financing from TriplePoint Venture Growth and Square 1 Bank. The Washington Post has more here.

Secret Escapes, a four-year-old, London-based members-only British travel deals site, has raised $60 million in a new funding led by Google Ventures, with participation from Index Ventures and Octopus Investments. The company has now raised $72.9 million altogether. TechCrunch has more here.

ShopKeep.com, a seven-year-old, New York-based  iPad-based payments-processing system allows retailers to accept a variety of payment methods, as well as keep track of inventory, employee hours, and customers’ contact information, has raised $60 million in new funding led by Activant. The company has now raised $97.2 million altogether. Venture Capital Dispatch hasmore here.

UpCounsel, a three-year-old, San Francisco-based on-demand network of pre-screened attorneys, has raised $10 million in Series A funding led by Menlo Ventures, with participation from previous investors Homebrew and Metamorphic Ventures. The company has now raised $13.9 million altogether. TechCrunch has more here.

Stripe, a five-year-old, San Francisco-based company whose APIs and tools enable businesses to accept and manage online payments, has raised an undisclosed amount of funding led by Visa, a round that reportedly values the company at $5 billion. The company had previously raised $300 million in funding from Sequoia Capital, American Express, and General Catalyst Partners among others. Both Sequoia and American Express participated in the newest round, too. Fortune has more here.

Yozio, a three-year-old, Oakland, Ca.-based which helps developers acquire more mobile users via an advanced analytics, growth-marketing platform, has raised $7 million in Series A funding led by Foundation Capital, with participation from firms including Illuminate Ventures, Webb Investment Network, and AME Cloud Ventures. The company has now raised $8.6 million altogether. TechCrunch has more here.

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Exits

Allergan, a Dublin, Ireland-based global pharmaceutical company, is acquiring Naurex, a seven-year-old Evanston, Il.-based biopharmaceutical company focused on treating central nervous system disorders, for $560 million. Naurex had at least $162 million from investors, shows Crunchbase. Its backers include Adams Street PartnersDruid BioVenturesGenesys Capital and Latterell Venture Partners. The Chicago Tribune has more here.

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People

Cisco’s new CEO, Chuck Robbins, announced some new appointments yesterday, his first day on the job. Zorawar Biri Singh is now Cisco’s CTO, and Kevin Bandy is the company’s Chief Digital Officer. Previously, Singh was a venture partner at Khosla Ventures. His earlier career was split between founding companies and working at HP, IBM, and Nortel Networks. Bandy was most recently senior vice president of enterprise transformation at Salesforce. Network World has more here.

Following a string of exits by women at Reddit, its head of community, Jessica Moreno, has just left the company, too.

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Jobs

Revo Capital, a two-year-old, Istanbul, Turkey-based venture firm focused on both enterprise and consumer-facing startups, is looking for an associate to help it establish a presence in Silicon Valley. The job is in San Francisco.

—–

Data

Europe-based venture capital firms raised more than €2 billion ($2.2 billion) in the second quarter of this year, a 30 percent jump compared with the same period last year, reports Venture Capital Dispatch. Recent amounts are still below those of the late ‘90s dot-com boom, it notes. In the second quarter of 2000, European VC firmed raised $3.9 billion (€3.5 billion).

Twenty-six companies (including 14 in the U.S.) plan to spend $1 billion or more each on Internet of things initiatives this year, according to research out from Tata Consultancy Services. Fortune has more here.

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Essential Reads

How Goldman Sachs became a tech-investing powerhouse.

Wired on Hollywood’s plan to smear Google.

—–

Detours

Bloomberg thinks Donald Trump is worth roughly $7 billion less than he says he is.

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Retail Therapy

The four-minute shower curtain. We may need to get one of these.




Quick Chat with Scalus Founder and CEO Kristen Koh Goldstein

uploads-23183691-ad7c-48c2-a2a6-a02ac1de0b85-_MG_6508-retouched-3By Semil Shah

Scalus, a five-year-old, San Francisco-based maker of workflow and collaboration software, was born out of necessity, says founder and CEO, Kristen Koh Goldstein, a former investment analyst turned entrepreneur. We recently caught up with her to learn more.

With Scalus and a company you founded previously, BackOps, you seem to have developed a passion and expertise around building software and networks for remote workers — how did that all come to be?

It’s fueled from a place of personal experience. After 9/11, I left Wall Street to learn operational finance and accounting at startups. Then life happened. I became a mom.  And I learned firsthand the challenges of being a mom and a professional. So I started BackOps, a back office service employing skilled moms who work from home between school dropoff and pickup.  The business grew quickly, doubling revenue every year for four years, so we ended up needing to develop software to clear the hurdles to scaling our business and Scalus was born.

Our corporate mission is to prove that the future of work includes workplace flexibility for all.  Our social mission is to get a million parents back to work by empowering them to be productive at work and engaged at home.

Speaking of remote workers, some of them are likely to be on contract. Have you been following the contractor versus full-employee debate as it relates to the on-demand sector? Any reactions?  

The labor laws haven’t caught up with the changing face of the workforce. The Millennial generation approaches employment differently than its predecessors. Companies look more like Hollywood productions or real estate development projects. The line between “internal” and “external” becomes much more blurred in this environment, where contractors can often have the same longevity and close working relationships as internal employees, especially across departments.

Philosophically, I believe it’s important to make a commitment to people who commit to you.  At BackOps, where I’m the chairwoman, my perspective has always been that unless you have an active income source elsewhere (you’re working for others), you are an employee of the company, even if just part-time on a temporary basis.

What’s your point of view on the increased attention paid to having more women in VC and investing roles in the Valley? Are there more women quietly doing this than we know about, or is it still pretty dismal? If so, what can change it quickly?

In angel investing, there have always been a lot of women funding and supporting early-stage companies. Shawn Byers, a prolific investor in female-led companies, is probably the only member of her family [which includes her husband, Brook Byers of Kleiner Perkins and their sons Blake Byers of Google Ventures and Chad Byers of Susa Ventures] who you haven’t heard about.  I think it’s quite possible that Shawn may end up backing just as many startups as Brook, Blake, and Chad. Full disclosure: Blake Byers is our biggest champion at Google Ventures, so we’re a big fan of the whole Byers clan.

I am thrilled that trailblazers, including Helena Morrissey and Sukhinder Singh Cassidy, are pushing forward the discussion about getting more women in the boardroom, which is a positive change toward getting more women in VC. I am also so grateful to the countless women quietly working behind the scenes, including Aileen Lee. Hopefully, more companies, especially startups where like-think reigns, will start diversifying their boards, which will increase the demand for female VCs, who will in turn invest in a broader range of founders who will seek diverse boards.

You’re an active angel and seed investor but keep a relatively low profile. Is that on purpose or all part of the plan?

It’s on purpose. I have been listening, learning, and waiting for the remote worker movement to come center stage. When the time is right to talk about what it means to empower everyone across an organization to determine the way that they work, you’ll hear a lot more from me.




StrictlyVC: July 27, 2015

Good Monday morning, everyone! Investor-writer Semil Shah is largely steering the ship the next few weeks. If you want to reach out to him about a column, you can find him on Twitter at @semil. (If you have any complaints about anything, you can always yell at Connie when she’s back online.)

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Top News in the A.M.

In addition to high-end boutiques and department stores, Apple will begin selling Apple Watch at Best Buy next month. Apple has declined to break out sales of the watch so far. The WSJ has more here.

Yikes. According to mobile security experts at the firm Zimperium, a gaping hole in Android software would let hackers take over someone’s phone, just by knowing its phone number.

In other (not great) news: The Future Of Life Institute, a Boston-based research organization, just published an open letter warning that artificially intelligent weapons could be in use within a decade and could have devastating effects on humanity. Stephen Hawking, Steve Wozniak, Elon Musk, and Noam Chomsky have endorsed the letter. More here.

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Quick Chat with Ryan Hoover of Product Hunt

By Semil Shah

Though not quite two years old, Product Hunt has become a highly popular platform for an expanding community of users who vote on and discuss tech tools. VCs clearly like it, too. The company has already raised $7.5 million from some notable investors, including Andreessen Horowitz, Slow Ventures, and investor-entrepeneur Alexis Ohanian. Recently, we caught up with the company’s founder, Ryan Hoover, to ask how things are going.

Almost overnight, you became “Internet famous” in tech circles. What’s that like?

My life has changed a lot in the past 12 months, professionally and personally.  Since the beginning, I’ve been a very public and approachable “face” of the company.  As a result, my following has grown and inbox has become unmanageable with people asking for feedback on their product, advice on how to market their product, and other requests. The flood of outreach can make me anxious because I genuinely want to help but I simply can’t without deprioritizing what’s most important — my family, friends, team, and health.

I’ve also become more self-aware in public as it’s not uncommon for someone to recognize me and introduce themselves as I’m walking down Market Street [in San Francisco] or grabbing food with friends at a restaurant. It’s flattering and I sincerely enjoy meeting Product Hunt fans, but we all want to escape work sometimes.

What’s the most-cited critique of Product Hunt?

When I invited the first few dozen people to contribute to the Product Hunt “MPV” — an email list highlighting new products — I reached out to startup folks I knew and respected.  We quickly expanded beyond these initial curators by referral from others in the community and since then it’s grown far beyond my relatively tiny network to a global audience, with half the community outside the U.S. Still, not everyone can post and comment on Product Hunt — you have to receive an invite from someone else in the community – and understandably, this frustrates some people. Eventually, Product Hunt will be open to all, but right now we’re focusing on slowly building the community.

Product Hunt recently launched Games. 

Last year, after Product Hunt gained early traction within the startup community, I thought hard about what it could become and what I wanted to build.  Our longer-term vision is build a platform and communities around all types of products.  Games was toward the top of that list.

How do you balance your taste and instincts versus pleasing the crowd?

The truth is, all of the products on Product Hunt are submitted by those in the community, with the exception of those that I and my teammates personally hunt.  Once posted, products rise or fall based on the number of legitimate upvotes they receives, discounting voting rings or fraudulent votes from those trying to game the system.

s the community has grown, we’ve already begun to see bifurcation in the types of products people gravitate toward. For example, people have been posting and upvoting games on Product Hunt since the beginning. While appealing to the general Product Hunt community, an enthusiastic subset was particularly attracted to this category and asked for their own place to share and discuss games. That was part of the inspiration to expand into gaming; as we expand to other categories, we’ll create new, autonomous communities that adopt and grow their own taste and culture. [Editor’s note: the newest of these channels focuses on books. You can learn more here.]

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New Fundings

AdAgility, a three-year-old, Waltham, Ma.-based marketing technology company, has raised $1.6 million in funding led by twin investors Tim and Todd McSweeney, with participation from existing investor Boston Seed Capital.

BroEx, a year-old, Gurgaon, India-based app that helps real estate brokers find inventory outside of their networks, has raised $1 million in seed funding round from Lightspeed India. More here.

DraftKings, a four-year-old, Boston-based daily fantasy sports site, has raised $300 million in new funding led by 21st Century Fox’s Fox Sports unit, in a deal that reportedly values the company at $1.2 billion. Other investors in the round include Atlas Ventures, the Raine Group, Major League Baseball, the National Hockey League, Major League Soccer, and the Kraft Group. Recode explains the deal here.

E27, a nine-year-old, Singapore-based tech blog and events business, has closed a $650,000 bridge round ahead of a planned larger raise (in the neighborhood of $3 million) before year end. In 2013, the company raised $615,000 in funding from numerous Southeast Asian investors, including 8capita Partners, Ardent Capital, B Dash Ventures, and Pinehurst Advisors. TechCrunch has the story here.

Hometeam, a two-year-old, New York-based company that has built software to match caregivers with senior citizens in need of in-home care, has emerged from stealth mode with $11 million in funding from Lux Capital, Iowa Ventures and Recruit Strategic Partners. More here.

MedGenome Labs, a two-year-old, Bangalore, India-based high-end diagnostics services company  has raised $20 million in Series B funding led bySequoia CapitalMore here.

Procurify, a three-year-old, Richmond, British Columbia-based maker of cloud-based procurement software, has raised $4 million in funding from earlier backer Nexus Venture Partners, along with Point Nine Capital and Business Development Bank of Canada. According to Crunchbase, the company has now raised $5.2 million altogether. More here.

Ra Pharmaceuticals, a seven-year-old, Cambridge, Ma.-based company that has developed a drug for a rare condition known as paroxysmal nocturnal hemoglobinuria, has raised $58.5 million in Series B funding led by Lightstone Ventures, Novo Ventures and RA Capital Management, with participation from Limulus Venture Partners and Rock Springs Capital. All existing investors, including Amgen Ventures, Morgenthaler Ventures, New Enterprise Associates and Novartis Venture Fund, also participated. Xconomy has more here.

SalesWarp, a six-year-old, Baltimore-based commerce management system designed to help retailers manage all of their retail and e-commerce operation, has raised $3.2 million in a $4 million round of funding from an undisclosed group of investors. Baltimore Business Journal has more here.

SutroVax, a two-year-old, South San Francisco, Ca.-based vaccines startup spun off from venture-backed Sutro Biopharma, has raised $22 million in Series A financing led by Abingworth, with participation from CTI Life SciencesLongitude Capital and Roche Venture Fund. More here.

Symphony, a year-old, Palo Alto, Ca.-based instant-messaging software company backed by many of Wall Street’s biggest firms, is seeking another investment round that may value the startup at as much as $1 billion, according to the WSJ. The company previously raised $66 million from 14 firms, includingGoldman Sachs, Morgan Stanley, J.P. Morgan Chase, and BlackRock.

Terbium Labs, a two-year-old, Baltimore, Md.-based cyber security startup that alerts clients the instant their stolen data appears on the dark web, has raised $3.7 million in funding from an undisclosed group of investors. More here.

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New Funds

Boldstart Ventures, a five-year-old, New York-based venture firm focused primarily on business-to-business startups, has closed on $20 million toward its third fund, which already moves it past the size of its second, $16.9 million, fund, closed in 2013. Venture Capital Dispatch has more here.

GSR Ventures, an 11-year-old Hong Kong-based venture-capital firm that invests primarily in early and growth stage technology companies with most of their operations in China, is raising a $5 billion fund to buy overseas assets, according to the WSJ. It plans to acquire companies in technology, Internet and biotechnology industries globally where the Chinese market is key to growth prospects. Much more here.

Village Capital, a six-year-old, Washington, D.C.-based venture firm, is rolling out what it calls the world’s “largest peer-selected venture capital fund,” with $13.2 million in commitments. The fund aims to make 100 investments in 75 companies that its network of entrepreneurs identify as promising. TechCabal has more here.

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IPOs

Square has reportedly filed confidentially to go public, leading many to wonder what this means for Twitter, being led currently by Square CEO Jack Dorsey.

Vizio, a 13-year-old, Irvine, Ca.-based that makes low-priced televisions, audio systems and other consumer electronics, has filed to go public, disclosing in the process plans to raise up to $172.5 million. The WSJ has more here.

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Exits

Technicolor SA has agreed to buy Cisco‘s TV set-top business for about $600 million. The WSJ explains why here.

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People

Facebook co-founder Eduardo Saverin confirmed over the weekend that he was married last month to Elaine Andriejanssen, a Tufts grad who has long worked as a quantitative research analyst at Franklin Templeton Investments (per LinkedIn). In a message posted on Facebook, natch, Saverin wrote: “I am incredibly happy and thankful to have married the love of my life. I look forward to building a family together and to contributing our time and resources to make the world a better place . . . I will wake up every single day of my life with an ingrained smile because of my beautiful, intelligent and caring wife Elaine.” (Oh.) The Singapore-based outlet Today has more here.

Ryan Smith, cofounder and CEO of the enterprise survey company Qualtrics, says his company’s success owes in large part to transparency, down to making employees’ vacation time, expense reports, and to-do lists public information.

Investors Tyler and Cameron Winklevoss last week filed paperwork to operate a bitcoin exchange called Gemini for both individual and institutional investors in New York state, reports Reuters.

“According to HP, men should avoid turning up to the office in T-shirts with no collars, faded or torn jeans, shorts, baseball caps and other headwear, sportswear, and sandals and other open shoes. Women are advised not to wear short skirts, faded or torn jeans, low-cut dresses, sandals, crazy high heels, and too much jewelry,” says the Register. More here.

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Jobs

Salesforce is looking to add a senior associate to its corporate development group. The job is in San Francisco.

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Essential Reads

Under government pressure, Fiat Chrysler agreed Friday to recall 1.4 million vehicles that can be cyber-hacked remotely. USA Today has more here.

Amazon is reportedly planning drive-up grocery stores. More here.

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Detours

How time impacts the laws of attraction.

Seven science-backed ways to get over your fear of public speaking.

Bill Murray stories too ridiculous to believe (yet true!).

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Retail Therapy

The Keezel “online freedom device.”

This Samsung monitor can wirelessly charge your phone.




Quick Chat with Ryan Hoover of Product Hunt

ryan-hoover-product-hunt-4-of-6By Semil Shah

Though not quite two years old, Product Hunt has become a highly popular platform for an expanding community of users who vote on and discuss tech tools. VCs clearly like it, too. The company has already raised $7.5 million from some notable investors, including Andreessen Horowitz, Slow Ventures, and investor-entrepeneur Alexis Ohanian. Recently, we caught up with the company’s founder, Ryan Hoover, to ask how things are going.

Almost overnight, you became “Internet famous” in tech circles. What’s that like?

My life has changed a lot in the past 12 months, professionally and personally. Since the beginning, I’ve been a very public and approachable “face” of the company. As a result, my following has grown and inbox has become unmanageable with people asking for feedback on their product, advice on how to market their product, and other requests. The flood of outreach can make me anxious because I genuinely want to help but I simply can’t without deprioritizing what’s most important — my family, friends, team, and health.

I’ve also become more self-aware in public as it’s not uncommon for someone to recognize me and introduce themselves as I’m walking down Market Street [in San Francisco] or grabbing food with friends at a restaurant. It’s flattering and I sincerely enjoy meeting Product Hunt fans, but we all want to escape work sometimes.

What’s the most-cited critique of Product Hunt?

When I invited the first few dozen people to contribute to the Product Hunt “MPV” — an email list highlighting new products — I reached out to startup folks I knew and respected. We quickly expanded beyond these initial curators by referral from others in the community and since then it’s grown far beyond my relatively tiny network to a global audience, with half the community outside the U.S. Still, not everyone can post and comment on Product Hunt — you have to receive an invite from someone else in the community – and understandably, this frustrates some people. Eventually, Product Hunt will be open to all, but right now we’re focusing on slowly building the community.

Product Hunt recently launched Games.

Last year, after Product Hunt gained early traction within the startup community, I thought hard about what it could become and what I wanted to build. Our longer-term vision is build a platform and communities around all types of products. Games was toward the top of that list.

How do you balance your taste and instincts versus pleasing the crowd?

The truth is, all of the products on Product Hunt are submitted by those in the community, with the exception of those that I and my teammates personally hunt. Once posted, products rise or fall based on the number of legitimate upvotes they receives, discounting voting rings or fraudulent votes from those trying to game the system.

As the community has grown, we’ve already begun to see bifurcation in the types of products people gravitate toward. For example, people have been posting and upvoting games on Product Hunt since the beginning. While appealing to the general Product Hunt community, an enthusiastic subset was particularly attracted to this category and asked for their own place to share and discuss games. That was part of the inspiration to expand into gaming; as we expand to other categories, we’ll create new, autonomous communities that adopt and grow their own taste and culture. [Editor’s note: the newest of these channels focuses on books. You can learn more here.]