The world just recently learned about the phenomenal growth of OfferUp, as reported last week at New York Times, Forbes, and Geekwire. We at Jackson Square Ventures first met the founders Nick Huzar and Arean van Veelen over 3 years ago and later led their Series A round in August 2013. We’ve been thrilled to be part of the incredible journey so far, and we’re confident that OfferUp is building one of the next great marketplace brands. OfferUp’s vision is to revolutionize local buying and selling – making it simpler and more trusted than ever before. I want to tell the story of their Series A financing. Let’s rewind to 2013 and talk about why we invested and how we saw the early network effects of the business. In late 2012, OfferUp did not have significant traction. I met with Nick and talked about the business. Continue reading "OfferUp Series A"
“People calculate too much and think too little” – Charlie Munger
One of the core principles of Jackson Square Ventures is that we don’t buy hype. Don’t get me wrong – we love it when a company in our portfolio does exceptionally well and receives a lot of attention. We try to avoid buying hype when there is no substance - we look out for it before we ever invest. We try to avoid buying the sizzle when there is no steak. Let’s talk about how to do that. First – let’s understand the source of hype in the first place. Why does hype occur? How does it spread? Incubators and accelerators are breeding grounds of hype - they put lists of companies out there and have a demo day to display their wares. Angellist is a breeding ground for hype – so are Mattermark and CBInsights and Product
Today we announce Jackson Square Ventures. We are an all-partner VC firm focused on Series A financings for SaaS and marketplace startups from our offices in the heart of the startup ecosystem in San Francisco at Jackson Square.
You may know a few of the companies in our portfolio, such as Docusign, Strava, and oDesk (now Upwork). You may know my fellow partners Greg Gretsch, Pete Solvik, and Bob Spinner. You may know the name Sigma West. We spun out of Sigma Partners in 2011 and named ourselves Sigma West to hold the history of the firm, but it turns out that being tied to the legacy name created confusion. We probably should have done this before, but now we are choosing a name that fits us. We are Jackson Square Ventures. There are three things you should know about Jackson Square Ventures. 1) We were all operators. Continue reading "Meet Jackson Square Ventures"
People in the startup ecosystem have been heralding the “unbundling of Craigslist” graphic for years now. This is the original from Andrew Parker. The conventional wisdom is to say that horizontal marketplaces will be replaced by vertical marketplaces. And why not – if you are designing a vertical marketplace you can have the user experience custom tailored to that vertical and provide a better experience. In theory, that should win in the long run. However, the reality is that many verticals will be better served by horizontal marketplaces for a long time to come.
There are two factors that matter most when looking at whether a horizontal or vertical marketplace makes the most sense. The size of the transaction and the frequency of the purchase.
These two factors combine to make a standard matrix. The upper left is the high price vertical and the lower right is the Continue reading "Vertical or Horizontal"