Crosslink closes new seed-stage fund with $170M in capital

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Crosslink Capital has closed fundraising for its seventh venture fund, raising $170 million in capital.

The new fund is somewhat smaller than the firm’s previous funds. Crosslink has a total of $1.6 billion under management, but the previous funds were not as focused on seed-stage and Series A investments.

“The reason is simple,” said Crosslink general partner Eric Chin. “There is more opportunity to get early exposure to unicorns at early stage, and we are focused on the pre-unicorns, so with Fund 7 a supermajority of deal flow will come from there.”

(Disclosure: Crosslink is one of the investors in VentureBeat.)

Crosslink noted Continue reading "Crosslink closes new seed-stage fund with $170M in capital"

Walden closes eighth fund, adding $107M to its war chest

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Walden Venture Capital has closed its eighth fund with a total of $107 million, which it will use to pursue investments in digital media and cloud companies. (Disclosure: Walden is an investor in VentureBeat.)

Walden focuses on what it calls “sprout stage” investments — a cute way of describing post-seed companies that have “sprouted” and are showing some customer traction. The firm typically invests $1 million to $4 million and prefers to take the lead investor position.

“I saw a marked shift in attitude toward venture capital” compared to 2008 and 2009, managing director Matt Miller told VentureBeat. “Back then, there was little appetite Continue reading "Walden closes eighth fund, adding $107M to its war chest"

These are the top 10 corporate venture firms that could invest in your startup

Google Ventures office Google Ventures
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Updated at 3:42 p.m. Pacific to add context about Salesforce Ventures.

Last year, venture capital funding hit its highest level since 2000, coming in at $47.3 billion, according to CB Insights, a startup that keeps tabs on private companies. And more than a quarter of that money came from companies’ venture arms.

That’s according to a new report out today from the firm.

The report says corporate venture investors made 656 deals, altogether shelling out $12.31 billion. That dollar figure is up 76 percent over 2013, and the deal count is up 25 percent. One interesting factor: Corporate venture firms are making

CB Insights
Continue reading "These are the top 10 corporate venture firms that could invest in your startup"

Why 2014 was a fantastic and terrible year for venture capital in Europe

European Union
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The latest numbers from Dow Jones VentureSource on venture capital in 2014 contain some reasons for Europe to cheer and some data that might have the region nervous about the future.

First, the good news.

In 2014, European companies raised €7.9 billion ($8.8 billion) in 1,460 deals. That’s 11 percent fewer deals but an increase of 25 percent in euros invested.

Also, Europe saw 55 venture-backed IPOs in 2014, triple the number in 2013. In addition, there were 201 acquisitions completed in 2014, up 21 percent from 166 in 2013. Good signs that mean more money flowing back into the startup ecosystem.

But!

That big year Continue reading "Why 2014 was a fantastic and terrible year for venture capital in Europe"

VCs invested $48.3B in 2014, highest level since 2000

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2014 was a huge year for venture capital — actually, it was its biggest since 2000.

More specifically, venture capitalists invested $48.3 billion in 4,356 deals last year, a 61 percent increase in dollars and a 4 percent increase in the number of deals from 2013, according to the latest MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters. This was also the first year in the report’s history during which two deals exceeded $1 billion each.

Not very surprisingly, Internet-specific and software companies in particular had blockbuster years. Internet-specific companies, which PwC and the NVCA define as Continue reading "VCs invested $48.3B in 2014, highest level since 2000"

Inside Trello, the venture-backed task-list app that’s determined to get big fast

The Fog Creek Software office in New York.
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NEW YORK — Over the summer, highly regarded New York software development shop Fog Creek Software spun out Trello, a product that a couple of developers had cobbled together three years earlier to help people keep track of what they have to do. Now Trello is taking off in a big way.

Fog Creek helped the new startup pull in a stockpile of venture capital and made sure Trello was outfitted with its very own corporate swag. But why now? And what made Trello so different from Fog Creek’s other developer-centric products, like bug-tracking system FogBugz and source code-hosting software Kiln?

It all happened because

Fog Creek Software cofounder Joel Spolsky at the company's office in New York.
A Kanban board.
Fog Creek Software cofounder and Trello chief executive Michael Pryor, right, speaks with Joel Spolsky, Fog Creek's other cofounder, at the Fog Creek office in New York.
The Fog Creek office in New York, where developers get their own soundproof rooms.
Joel Spolsky's MacBook. Spolsky once worked for Microsoft.
Continue reading "Inside Trello, the venture-backed task-list app that’s determined to get big fast"

The personal costs of raising money

Who's holding the strings now?
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In the tech industry, we celebrate raising money as a victory second only to that of a successful exit.

And while I recognize that venture capital is often an unavoidable requirement for growing a business, most entrepreneurs, and the tech community at large — who often seem to push people into raising VC — would be better served viewing it as a necessary evil as opposed to an absolute win.

I’m sure you’ve heard the horror stories of entrepreneurs getting fired from their companies by their VCs, but most of those stories only tell the tale of the final straw. Have you ever thought about all Continue reading "The personal costs of raising money"

What to do when a VC says no

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You have the concept. You have the passion. You have the team. You even have a meeting lined up with your dream VC. So what do you do when a VC rejects you — multiple times?

I learned this lesson from personal experience. Here’s my story.

Mike Maples, Jr. is the managing partner of Floodgate. Mike is a master at transforming startups into $100 million companies. His angel investments have included Twitter and Digg, and he took his own startup, Motive, Inc., from an idea to a publicly-traded $75 million business.

Mike, one of Silicon Valley’s pre-eminent VCs, promptly rejected my company Egnyte during our first attempt at Continue reading "What to do when a VC says no"

The startup’s ‘customer partners’ slide: All those logos and no dollars? 

Startup office Heisenberg Media Flickr
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Pitches for early-stage companies that have already released a B2B product typically include a slide full of client logos, which they use as proof of “traction.” Whenever I see this my ears perk up, as it’s no easy feat signing on so many paying customers at an early stage, and my mind starts calculating the probable revenue run rate.

But then, when I ask how much these “clients” are paying to check if my calculations are correct, it’s as if I’ve caught the entrepreneur off guard. Like a deer caught in headlights, they tell me “well, for the pilot/beta phase we are giving a deep Continue reading "The startup’s ‘customer partners’ slide: All those logos and no dollars? "

VCs have already invested $3B more in 2014 than they did in all of 2013

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Venture capitalists are already surpassing last year’s investments in terms of dollars and are increasingly interested in later stage companies, according to a new report by PwC/NVCA MoneyTree based on data from Thomson Reuters.

The report says VCs have invested $33 billion dollars this year, compared to last year’s total investment of $30 billion — and there’s still another whole quarter to account for.

Much of this year’s investments went towards software startups, which took home a little more than a third of the $9.9 billion invested in quarter three, the report shows. The media industry followed, with $1.8 billion invested, a 23 percent increase from the previous quarter. Investment in life Continue reading "VCs have already invested $3B more in 2014 than they did in all of 2013"

Less is more: Resist the urge to raise too much capital         

Not about money

This sponsored post is produced by Lighter Capital. 

The momentous decision to seek funding to accelerate the growth of your company is often followed by nagging questions: Am I raising too much capital? Too little? Just how much funding do I need?

Securing as much financing as you possibly can is a common approach — and an understandable impulse. With more capital on hand, you’ll be able to jump on new opportunities that arise so you can respond to market shifts swiftly. This can be a huge value to your company, since launching your product or update more quickly than your competitors often means grabbing more market share, which can boost revenues and raise the valuation of your company.

Risks of raising too much capital

Despite the apparent value of having a large reserve of capital, there are certainly risks to overextending yourself, which is why Lighter Capital Continue reading "Less is more: Resist the urge to raise too much capital         "

Formation8 is raising $500M for its second fund


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Formation8, the venture capital firm co-founded by Palantir co-founder Joe Lonsdale, is a raising a second fund.

The firm doesn’t appear to have brought in any of the money yet, but it’s aiming for $500 million, according to a filing to the US Securities and Exchange Commission from today.

Formation 8 closed its first fund at $448 million in the spring of 2013. The firm’s investments include Glow, Radius, OpenGov, Wellframe, Wish, Context Relevant, Leeo, Lucid, and Addepar, among others, and has seen two exits already — Oculus Rift, acquired by Facebook, and RelateIQ, acquired by Salesforce.

Along with its headquarters in Silicon Valley, Formation8 Continue reading "Formation8 is raising $500M for its second fund"

The rise of community managers means VCs are sharing more information about their companies

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Want to master the CMO role? Join us for GrowthBeat Summit on June 1-2 in Boston, where we'll discuss how to merge creativity with technology to drive growth. Space is limited and we're limiting attendance to CMOs and top marketing execs. Request your personal invitation here!

The traditionally secretive culture of old-school venture capital may be changing. These investing firms have increasingly been hiring community managers to help foster a network within their portfolios. And what started with a few spreadsheets is now evolving into new technological platforms and tools to connect these companies. What’s more, VCs are starting to share information with each other in order to provide their portfolio networks with aggregated data on what other startups are doing to succeed.

Keiretsu reinvented

Though the VC community manager position is relatively new, the concept of portfolio networks has been around a long time. Many VCs embraced the idea of “keiretsu” in the ’90s, during the first dot-com era. Continue reading "The rise of community managers means VCs are sharing more information about their companies"

VC pitch tip: Make sure you don’t overload your advisory board slide

Don't let the slide showing your advisory board look this crowded.
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It’s common practice for early stage startups to recruit an “advisory board” to expand their capabilities without adding more employees to their team. This is all well and good, but usually in early stage startups, the amount of people in the advisory board outnumber the amount of employees.

If not properly presented, this slide can slow down the flow of a pitch without providing any value.

The “Loaded Team” Slide

Usually founders include a slide in the beginning of their pitch decks describing “The Team.” This makes sense, since in early stage startups, team quality is the most important criteria for investors.

However, given Continue reading "VC pitch tip: Make sure you don’t overload your advisory board slide"

A Twitter interview with Marc Andreessen on startups, wearables, and his next offices


Marc Andreessen is kind of a big deal. As the co-author of Mosaic, the first widely used browser, one might say Marc is the inventor of the Web browser as we know it.

Marc is also well known as one of, if not the, leading venture capital investors along with partner Ben Horowitz. Landing an investment from Andreessen Horowitz, Marc and Ben’s firm is a dream come true for every startup across the globe; the firm’s companies include Twitter, Skype, Zynga, Groupon, Foursquare, Pinterest, and a little company called Facebook.

I kind of set myself a goal several years ago to try to learn from the greats. I decided I would start conducting interviews with people, mostly in tech, who inspire me.

Over the years, I have interviewed, whether by email, Skype, Hangouts, or in person, people like Guy Kawasaki, Walt Mossberg, and (one of my most recent ones

twitter-interview-andreessen
Continue reading "A Twitter interview with Marc Andreessen on startups, wearables, and his next offices"

Why U.S. VC firms missed out on Alibaba — and most other big Chinese opportunities


Alibaba’s recently announced $16 billion IPO has VentureBeat reporters scratching our collective head: Why weren’t more U.S. growth funds involved in Alibaba’s rise to domination?

Alibaba has a hand in every game imaginable: Social networking, payments, travel, online commerce, and dozens more. Its own list of investments rivals that of any major VC firm.

But somehow, while one U.S. private equity firm (Silver Lake Partners) and Yahoo participated in the mega-giant’s funding, most American firms sat it out.

So, why? Why are U.S. investors squeamish on one of the most exciting investment opportunities on planet Earth right now?

For many of the folks we spoke to, it comes down to an acknowledged lack of understanding about the Chinese startup market. It’s booming, but it’s hard to know the entire competitive landscape. It’s hard to sniff out a good deal in a less regulated economy. Plus, China has Continue reading "Why U.S. VC firms missed out on Alibaba — and most other big Chinese opportunities"

Towards a VC code of conduct


Gil Dibner is a venture capitalist at DFJ Esprit, part of the DFJ network

It’s a new year – and in the spirit of new year’s resolutions and efforts for self-improvement, I’ve decided to put down on paper the code of conduct by which I try to operate as a VC – in the hopes that others will add to it where it is lacking and, perhaps, adopt parts of it that they find helpful.

Above: Gil Dibner

Image Credit: LinkedIn

The venture business is a complex one – and the relationships between VCs and entrepreneurs are sometimes fraught with tension. Experienced VCs have seen thousands of companies and dozens of financing rounds. Most entrepreneurs are working on their first company, or perhaps their second or third. There is, often, an experiential advantage that VCs enjoy relative to entrepreneurs – when it comes to the VC-entrepreneur relationship, we Continue reading "Towards a VC code of conduct"

Why VCs aren’t insanely rich

Man standing with cash raining

Arie Shpanya is the CEO of WisePricer

I’ll start with a spoiler, or more precisely the bottom line: VC’s are not that insanely rich, or at least the vast majority of them.

Jason Lemkin, a managing director at Storm Ventures, recently mentioned in his post on Quora that venture capitalists end up with personal effective ownership of 32-40 percent of a “company” on a “one company equivalent” basis.

Here is a recap of the assumptions:

  1. VCs invest 20 percent in 20 companies
    A VC that does A/B rounds and buys 20 percent ownership each time they invest.
  2. The VC gets 4 percent of the gains
    Firms (not partners, we’ll come back to it later) typically themselves keep 20 percent of the gains on 20 percent ownership.
  3. Personal effective ownership in each is 32 percent
    VC firms typically invest in eight deals per VC (8 deals times 4 percent)

The bottom line is effective ownership of

Continue reading "Why VCs aren’t insanely rich"

Africa and venture capital: How VCs can help 12 of the world’s 20 fastest-growing countries


Amr Shady is the CEO of TA Telecomone of the fastest-growing companies in the Middle East and Africa.

Africa’s economic acceleration is no secret.

Over the past ten years, while much of the developed world has witnessed recession, Africa has gained a commercial vibrancy driven largely by a technological revolution and greater investment in infrastructure. Although political stability is still longed for in many parts of the continent, and poverty remains widespread, the IMF projects that 12 of the world’s 20 fastest-growing national economies over the next five years will be in Africa.

Amr Shady

Above: Amr Shady

Image Credit: LinkedIn

Progress indeed. However doubts are emerging over the continent regarding whether the African people will reap the rewards of this growth.

Such promising financial figures have not gone unnoticed abroad, attracting some of the world’s biggest organisations. In the last few years, Google, IBM, and Microsoft are just Continue reading "Africa and venture capital: How VCs can help 12 of the world’s 20 fastest-growing countries"

In which I get an emailed invite to invest in a startup, courtesy of JOBS Act Title II

piggy bank
Title II of the President Obama’s JOBS Act says that entrepreneurs seeking cash can now notify the world. And that’s exactly what’s starting to happen. About four minutes ago, I got this email from Chasm.io, formerly Wahooly: wahooly raising moneyIn short, CEO Dana Severson says the company is growing like a weed but the ride has just begun, so the company is now raising money. If I’m an accredited investor (err, that would be a no), I’m invited to invest. And if not? Then the company would love to have me share this message:
Chasm.io is raising money on AngelList. Please spread the word. https://angel.co/chasm-io
Consider it shared, Dana. “What triggered it was a piece by Paul Carr on his company, NSFW,” Severson told me on the phone minutes ago when I asked him for further details. “He literally did a blog post soliciting investment. It instantly Continue reading "In which I get an emailed invite to invest in a startup, courtesy of JOBS Act Title II"