VC Signalling Risk in Seed Rounds

 CB Insights  just published an interesting post about signalling risk i.e. the startup survival risk generated by getting a Tier I VC into the seed round who does not follow their money into the Series A. The data suggests getting no support from a brand name on your next round decreases you overall chance of getting financed (these conditional probabilities are a bit doubtful given the clear correlation between these events). As usual, however, statistics only tell part of the story and hide a more complex reality.
seed a followon smart money v3
 
 
VC's do seeds for a reason It's worth reminding everyone that investors commit limited amount of money in seed rounds for a reason, and that is to manage their capital at risk; in other words, to have the option to not follow their initial money in a promising but fundamentally unproven project. The arguments between VC's in this regard center around
Top vcs seed re investment rate v2
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Pillpack: Adding $50M in funding to bring redesigned pharmacy to all

There are some people in the world that it is simply a joy to work with, and when good things happened to them you can only feel joy.  TJ Parker and Elliott Cohen are two such people and I'm delighted with the new milestone our company Pillpack has reached. 

$50 Million in New Funding 

Pillpack just announced a $50M round led by George Zachary (of Twitter and Yammer fame) and Rafael Corrales at CRV with new money from Pravin Vazirani and Tylor Sosin at Menlo Ventures (another awesome duo) and Shervin Pishevar at Sherpa Ventures (with a fashionably minimalist website :-)).  Accel Partners is also participating meaningfully to the round.

Pillpack signing Term-sheet

Yes this his how this stuff gets done - Exhausted but happy TJ and Elliott (behind camera) with George and Rafa signing the term-sheet

It's not so much that raising a big round in itself makes me happy (though Continue reading "Pillpack: Adding $50M in funding to bring redesigned pharmacy to all"

Pillpack: Adding $50M in funding to bring redesigned pharmacy to all

There are some people in the world that it is simply a joy to work with, and when good things happened to them you can only feel joy.  TJ Parker and Elliott Cohen are two such people and I'm delighted with the new milestone our company Pillpack has reached.  $50 Million in New Funding  Pillpack just announced a $50M round led by George Zachary (of Twitter and Yammer fame) and Rafael Corrales at CRV with new money from Pravin Vazirani and Tylor Sosin at Menlo Ventures (another awesome duo) and Shervin Pishevar at Sherpa Ventures (with a fashionably minimalist website :-)).  Accel Partners is also participating meaningfully to the round. Pillpack signing Term-sheet Yes this his how this stuff gets done - Exhausted but happy TJ and Elliott (behind camera) with George and Rafa signing the term-sheet It's not so much that raising a big round in itself makes me happy (though Continue reading "Pillpack: Adding $50M in funding to bring redesigned pharmacy to all"

Developing London tech clusters beyond Shoreditch: Croydon ?

 Here in London we're all very proud of the progress made over the last few years.  Having come back from 4 years in Boston, I have been surprised by the level of maturity that we have achieved and how far we have come.  

But London is a city of 9 million and our efforts and mindshare right now are still very much focused around Mayfair, Soho, City and the City Fringes.  The question is: how do we successfully take innovation into Dalston, Hammersmith or even Croydon?

London Rising

Perhaps the fast and furious progress London has made is best highlighted by the following data in the recent trade mission led by Mayor Boris Johnson (in collaboration with London &Partners):

Cytokinesis at Atlas Venture: bio and tech take off

Atlas Venture announced at his latest annual meeting that the biotech and tech groups were going their own way.  Since I did spend ten years there, let me give you my view on it.

Aligned, yet different

The two groups had a ton in common.  Both are laser focused on early stage and have espoused a model of being super capital efficient and lean early and supporting hard and fast scaling once companies show promise.  

Both groups have been innovating for a few years now in adapting fast to changing market conditions, with biotech showing the way in "asset light" and virtual companies and the tech group in pushing a high-velocity seed approach and more recently spearheading the development of Angellist Syndicates in Boston.

But as these strategies indicate, the rapid market evolution especially in tech meant the models were rapidly drifting further apart.  Whilst the biotech guys would Continue reading "Cytokinesis at Atlas Venture: bio and tech take off"

Zoopla at seven – how focus and speed drive exceptional outcomes

 I first invested in Zoopla in July 2007.  At the time, a mere £500,000 to get the company going and back Simon Kain and Alex Chesterman in improving the real estate experience.

Last week, almost exactly 7 years after this first investment, Zoopla released its last set of numbers:  40 million monthly visits,  six-months revenues of £38.8 million and a profit margin that is flirting with 50%.

As I left the last board meeting, I marvelled about how this management team had taken the business so far and so fast; this is not so much as statement about the top line as a statement about having built a sustainable, robust, profitable and extremely well run machine in such an incredibly capital efficient manner (the company only ever took cash from Atlas and Octopus and a few angels, and not that much of it).

Zoopla was launched in 2008 with

zoopla reception
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The Boston Surprise

 Now that I am leaving Boston I can talk about its startup ecosystem in all candor.  

When I came over 4 years ago, it was essentially as an act of belief in my partner Jeff and in myself. To be frank, I did not expect much. Talk was of dreary winters and a boring town full of boring VCs with not much happening. For that was the perception of the region from afar.

I could not have been more wrong. I am starting to measure the progress that was made in the last four years, too.

When Oculus VR was sold recently, I know many people were surprised to hear Boston mentioned in connection with the company. Surprised to see the smiling face of Matrix Partners’ Antonio Rodriguez sporting an early prototype next to the press articles. I think most people assumed the company was based in California

antonio oculus
boston magazine marathon cover
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Why Series B is usually the hardest

 Tom Tunguz and Danielle Morrill both came out with data suggesting Series B are hard.  Tom calls it the "hardest round to raise", based on his numbers.  Let me try to address why that is.  

Let's assume we're in a B2B SaaS company with a solid technological base.  You started four years ago and you've raised a $1M Seed and a $5M Series A.  You're searching for the best way to scale commercial when Series B comes around the corner, faster than you thought with that $300K burn that crept up on you.

Series B is hard for a simple reason: suspension of disbelief fades and is replaced by an increasingly cold, hard look at milestones and progress.   Series B is the round where the rubber meets the road, where the promise has to be met with numbers and projections.  Series B is the round where hard nosed investors

crunch
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Pro-rata rights: the good, the bad and the ugly

 Fred Wilson posted an article to explain the concept and value of pro-rata rights, with his usual elegance in making the concept clear.

Pro-rata rights are incredibly valuable for a simple reason: most startup companies fail, but pro-rata rights are your way to ensure that you can keep investing in the ones that make it.

Think of it another way: like a good trader (and contrary to human nature), you should cut your losses early and keep investing in your winners. The nature of the venture capital game, when played at a very early stage, is that one or two bets will generate most of your returns. When you see those (and I will address in a separate post the very imperfect ways in which you can try to identify winners early), then you should double down.

Ah, if only reality could be so readily pliable...

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How we can thrive in a world of Chaos

Late last year I gave a TEDx talk about "thriving in a world of chaos", looking at how we can deal with a level of unpredictability and a speed of change we were not genetically designed for and searching for some answers to the question of balance, performance and happiness in the face of uncertainty.

The talk was part of TEDxBeaconStreet, itself an incredible feat of ingenuity pulled of by John Werner who you will find these days roaming the halls of the MIT Medialab.  Enjoy and let me know what you think.

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Backing PillPack : a pharmacy you might actually love

Pharmacies are like banks.  When you have to go to one, it's usually an unpleasant experience delivered in often indifferent fashion by overworked people.  TJ Parker and Elliott Cohen, the founders of Pillpack, together with the rest of the team, are out to demonstrate that you can build a pharmacy you might actually love.  

The service is launching today, so if you know anyone who spends too much time sorting pills and not enough time playing with their grandkids, sent them to pillpack.com.  They could be a mental health patient, a recent stroke sufferer or an elderly relative confused about their medication.

pillpack dispenser notjustprettycolours
 

David Frankel at Founder Collective and I are backing them with $4M (together with angel friends) to make it happen.  I owe the discovery of this little gem to Katie Rae at Techstars, so not exactly a well hidden secret but hey, 99% of this game

pills 2
pillpack hand with packet notjustprettycolours
Continue reading "Backing PillPack : a pharmacy you might actually love"

Backing PillPack : a pharmacy you might actually love

Pharmacies are like banks.  When you have to go to one, it's usually an unpleasant experience delivered in often indifferent fashion by overworked people.  TJ Parker and Elliott Cohen, the founders of Pillpack, together with the rest of the team, are out to demonstrate that you can build a pharmacy you might actually love.  

The service is launching today, so if you know anyone who spends too much time sorting pills and not enough time playing with their grandkids, sent them to pillpack.com.  They could be a mental health patient, a recent stroke sufferer or an elderly relative confused about their medication.

pillpack dispenser notjustprettycolours
 

David Frankel at Founder Collective and I are backing them with $4M (together with angel friends) to make it happen.  I owe the discovery of this little gem to Katie Rae at Techstars, so not exactly a well hidden secret but hey, 99% of this game

pills 2
pillpack hand with packet notjustprettycolours
Continue reading "Backing PillPack : a pharmacy you might actually love"

Uber vs. Le Taxi: The Disrupter and the Disrupted

Recently I just felt compelled to write a post about French Minister Montebourg and his ridiculous contortions to explain barriers put on innovation under what I termed “Slow Innovation”.  Adjacent to this story was a very public row around Travis Kalanick’s Uber service and concerted efforts to slow down its spread in France. The story of Uber vs Le Taxi Francais is emblematic of a societal debate that is growing in importance and I believe will come to define the coming decade.

Ayn Rand against the world
On the one hand, I give you a literal Ayn Rand fan (see Paul Carr / PandoDaily's "Cult Of Disruption") who believes his service should be allowed to take over the world at speed and will lash out at anyone who suggests otherwise. A Rayndian and Schumpeterian hero of the Silicon Valley who symbolizes disruptive innovation (see also Elad

ayn rand
uber app
Uber attaque taxi pneu
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Seed to Scale: towards a $30M round for Integral Ad Science

 I hate high capital intensity, yet here I am celebrating a $30 million (thirty) for Integral Ad Science led by the excellent August Capital with my beloved CEO telling Techcrunch "we did not have to raise".   So what gives ?

The wedge: narrow, but unique

I invested in Integral (f.k.a. Adsafe Media) in 2010, a mere 3 years ago.  At the time Adsafe had almost no revenues and a narrow if unique value proposition: page-level brand safety for display advertising.  The company marketed itself as "the standard for brand safety online".  What it did have was the very unique ability to do page-level content analysis in near-real time and effectively redirect ad calls before they even got served.

The gorilla at the time was a company called DoubleVerify, known for "aggressive" marketing tactics and systematic publisher bashing (cfr. this article: "going after competitors’ clients by firing

integraladscience
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