Hi, everyone, welcome back! Hope you had a nice weekend.
As some of you read one week ago, but we’re hosting our next StrictlyVC event on Thursday evening, September 29, and if you’re in the Bay Area, you won’t want to miss it. Half our seats vanished at first mention, so don’t wait too long to get yours.
Thanks to our partners Bolt, the early-stage hardware-focused fund, and Ballou PR, which represents many investors and startups (from Stripe to Accel Partners). It’s sponsors that make these fun nights possible and we appreciate them.
Top News in the A.M.
Prime Minister David Cameron this morning rejected calls for a do-over vote on leaving the European Union and set up a team of officials to prepare for withdrawal following the referendum last week that stunned the world. The markets are being slammed again today as a result.
Jason Lemkin Just Raised a $70 Million First Fund; Here’s How He Did it
Two-time entrepreneur Jason Lemkin just closed a debut venture fund with $70 million called SaaStr Fund.
It’s an impressive feat and the latest in a string of interesting opportunities that Lemkin has created for himself since selling his most recent company, EchoSign, to Adobe four years ago.
It started with blogging. Lemkin also began actively answering questions about SaaS businesses on Quora — and people listened. Soon, he’d created a popular site that publishes SaaS-related tips and news, along with a growing events business, one whose yearly SaaStr Annual conference attracted more than 5,000 attendees earlier this year.
All have worked together to lead Lemkin (who also worked briefly at 16-year-old Storm Ventures) to this point. Last week, we asked him to share a little more about how he did it.
Your debut fund is huge, considering that you’re the only GP. Are your investors a mix of institutions and individuals?
No. I have a handful of VCs who know what they’re doing, but I think high-net-worth individuals are a terrible idea. No matter how sophisticated they are, venture is too illiquid. The timeline is too long. When you’re an angel investor, you can maybe see a 50x return on your dollars. But in a tiny fund – even with a Union Square Ventures — you’ll do 8x in the best-case scenario and it’ll take the fund 12 years. It’s stupid. And I don’t want unhappy customers.
So your backers are endowments? Pension funds?
Top endowments, big universities, hedge funds.
Hedge funds don’t mind being locked up for a dozen years?
They’re interesting. They want to find a place to play where they can see high returns, so they want exposure to the best managers so they can see the best companies at their “pre unicorn” phase. They don’t want to do the $3.5 billion round but the round before that, including [by way of special purpose vehicles, which VCs organize when they want to make aparticularly large bet in one portfolio company]. So if you squint and look at a lot of emerging managers, a lot of time they [feature hedge funds as LPs].
What’s in it for your VC investors — deal flow?
When you have a fund like this, you want to build two downstream layers. One of Series A VCs, and whatever the next stage is. So I have folks who are involved with my fund who’ve also put money into my companies and who I want to continue to [know], from Emergence [Capital], Social Capital, Bessemer [Venture Partners]. Then, in a perfect fund, you want folks who can invest even later. What you don’t want to do is take second check risk.
Affiris, a 13-year-old, Austria-based developer of therapeutic peptide vaccines, has raised $10.9 million in funding from FCPG Affi, with participation from earlier backers MIG Funds and the Strüngmann family. More here.
Arevo, a three-year-old, Santa Clara, Ca.-based company that says it has developed advanced materials, intelligent software, and “additive” manufacturing tech to create ultra-strong composite partners, has raised $7 million in Series A funding led by Khosla Ventures. More here.
D3 Banking, a nine-year-old, Omaha, Ne.-based company that helps traditional, mid-size banks digitize and simplify their own platforms, has raised $10 million from West Partners, a San Diego-based investment firm. More here.
MisterFly, a two-year-old, Paris, France-based online travel agency, has raised €20 million ($22 million) in first-round funding led by private equity firm Montefiore Investment, with participation from the e-commerce company Vente-Privee. Tnooz has more here.
Orbital Insight, a three-year-old, Palo Alto, Ca.-based geospatial big data company, has just raised $15 million in Series B funding led by previous investor GV, with participation from CME Ventures and earlier backers Sequoia Capital, Lux Capital, and Bloomberg Beta. Together, with an investment and development agreement from In-Q- Tel, the company has $20 million in fresh capital altogether. TechCrunch has much more here.
Quoine, a two-year-old, Singapore-based bitcoin trading platform, has raised $20 million in Series A funding led by JAFCO. VentureBeat has more here.
Real World Retail, a three-year-old, Dublin, Ireland-based retail analytics start-up, has raised €920,000 ($1 million) in funding from angel investors and Enterprise Ireland. More here.
Thrive Market, a three-year-old, L.A.-based online discount marketplace for healthy foods, has raised $111 million in new funding led by Invus Group, with participation from Greycroft Partners, Cavu Venture Partners, Cross Culture Ventures and e-Ventures. Dealbook has more here.
Bee Partners, an eight-year-old, San Francisco-based seed stage firm, has closed a second fund with $30 million. Among its bets: TubeMogul, now a publicly traded ad-tech company. Bee was also an early backer of the crowdfunding platform Indiegogo, drone tech startup Skycatch, and the second-hand fashion marketplace Tradesy. TechCrunch has more here.
Nikesh Arora surprised the business world when he suddenly resigned last week from Softbank. In this interview with Fortune, he speaks candidly about what went down.
Google co-founder Sergey Brin says not to come to Silicon Valley to start a company. Here’s why.
B Capital Group, a new venture capital fund founded by Raj Ganguly and Eduardo Saverin, has brought aboard Gavin Teo as partner to lead the firm’s San Francisco office. (It also has an office in L.A. and Singapore.) Teo was most recently investor at Comcast Ventures, where he focused on digital healthcare, connected home and VR.
Amazon is doubling down on its Dash push-button ordering devices, getting dozens of consumer-products companies to invest in the gadgets even amid evidence that consumers are cool to them.
Some of the web’s biggest destinations for watching videos have quietly started using automation to remove extremist content from their sites, according to Reuters sources. More here.
Why a Palantir IPO may not be far off.
This foul-mouthed parrot may be used as evidence in murder trial.
Prediction: Malaysian designer Moto Guo will be entering a new line of work in the not-too-distant future.
Steel yourselves. The Mac n’ Cheetos — deep fried sticks of macaroni cheese encrusted in a Cheetos-flavored shell — hits select Burger King locations today. The Washington Post bills the item as a “food monstrosity” that is “sadly genius.”