Squarespace, the 14-year-old platform that makes it easy for essentially anyone to build their own website, is raising about $200 million from General Atlantic, valuing the company at a $1.7 billion valuation, Bloomberg reports. The plan with the funding is to buy stock from early employees and investors, giving them a way to cash out if they’re not trying to wait around for an IPO. Read More
In my startup investing, inside portfolio companies at the highest leadership and board levels, I always want to make sure that a pessimist has a seat at the table. I want a table full of optimists, but I also want at least one respected pessimist sitting there. That pessimist should carry a general lack of confidence in humans to behave logically or ethically. They should also have seen many shit-shows in their lives. You don’t want someone who is just irrationally afraid that the sky is falling, but you do want someone always thinking about the downside case.
As it turns out, often that pessimist is the CFO or the General Counsel. These tend to work well as long as they are respected and have a voice. Without a pessimist in the room, with a seat at the table where the big discussions happen, there is no balance.
Continue reading "The pessimist in the room"
Last month San Francisco-based Bitwise Investments announced a passively managed index fund comprised of the top 10 cryptocurrencies by market capitalization. The fund rebalances once a month, and all assets are held in cold storage. Essentially its an easy way for investors to gain some passive exposure to cryptocurrency without having to worry about which ones to choose and how to buy and… Read More
We’ve all seen the growth curve on the left – all successful startups strive for a version of one. But in reality, the notion of a smooth growth curve actually masks how most successful companies truly grow.
Our experience at Foundry suggests that if you blow up the growth curve you’ll find that companies grow linearly and that what creates the log curve is a series of small changes that either change the slope of the growth (it’s still linear, but now growing faster) or that “jump” the growth curve up (growing at the same rate but now from a high base). Examples of things that fit in the first category are changes in sales efficiency, successfully adding to the sales organization, establishing channel relationships that add predictable revenue, etc. Typically these are small and change the slope of growth only a bit at a time. But over time they Continue reading "How Startups Actually Grow"
Have you ever bought something only to see it go on sale the next day? It may seem like bad luck, but you’re often still entitled to get that discount. Some retailers and credit card companies will even guarantee price drop refunds for up to 90 days. But it can be a hassle to keep track of price changes and to follow through and get your money back. A handful of sites have been… Read More
Alicia Navarro, the CEO and co-founder of Skimlinks, offered some key advice to early-stage entrepreneurs attending the TechCrunch Disrupt Berlin 2017 conference this morning – and that’s to not waste time trying to woo U.S. investors as a seed-stage company. They just won’t be interested, she said. “There’s almost zero percent chance you’ll get a U.S.… Read More
Drawbridge Health wants to make it easier for doctor’s offices and clinics to collect small samples of your blood for testing on site with a handheld device. The device uses proprietary technology to collect and stabilize just a few drops of blood for various tests like hormone levels, genetic testing, monitoring disease and other things patients normally have to get done at an outside… Read More
SoftBank Group has confirmed that it has found likely sellers for the tender offer for Uber’s shares, which launched tonight. These are the shares from existing shareholders that will be sold at more than a 30% discount to Uber’s last private round. The Japanese investment firm provided us with the following statement. “SoftBank and Dragoneer have received indications… Read More
The story of AppLovin‘s acquisition has taken another turn. We first reported that the mobile ad startup was in acquisition talks in August of last year, and the announcement came a month later: AppLovin would sell a majority stake Chinese private equity firm Orient Hontai Capital. Today, however, CEO Adam Foroughi revealed that the deal is (sort of) off. Instead of an outright… Read More
A proposed tax that charges people as their startup equity vests instead of when they cash it out and actually have money to pay the taxes could wreck how tech companies recruit talent. And the industry doesn’t have much time to mobilize to get this tax changed. The U.S. Senate released its proposed tax reform bill late last week under the aggrandized “Tax Cuts and Jobs… Read More
The latest Senate version of the “Tax Cuts and Jobs Act” has a stab in the eye for startups. It proposes to tax certain stock options and RSUs at the time of vesting. An earlier House version also contained this provision, but the House removed it.
Startups are a key part of innovation. Often joining a startup means accepting a lower cash compensation for a higher potential upside. This upside usually comes in the form of stock options or other stock based compensation such as restricted stock units (RSUs). For these to be effective means of offsetting lower current compensation, they need to provide upside with no downside.
In particular, an employee should not own taxes on the appreciation of the capital until they actually have liquidity in the asset. Everything else runs the risk of having to pay taxes on paper gains that subsequently evaporate. This problematic situation Continue reading "Call Your Senators to Preserve Equity Compensation for Startups"
A group of female venture capitalists are launching a series of office hours for female founders. The idea is to host free, quarterly events that explore topics across the range of company stages — from early to hyper-growth. The first event, on November 30 in San Francisco, will be geared toward helping seed-stage female founders finesse their pitches. It will kick off with a talk, by… Read More
Two years ago I wrote a series of blog posts on board effectiveness tips. I am adding a new one today. If you have a large board, make sure you have a lead director. “What is a lead director?” you may ask. Informally speaking it is the director who makes sure that the board reaches consensus on important issues. Some companies formally elect director to the lead role, but this is uncommon for startups.
Startups that have raised multiple rounds of financing can wind up with large boards with three, four or more investors on it. In these cases a disfunction that I have observed more than once is that each investor waits for some other investor to take the lead. And as a result key decisions are either delayed or not made at all, often with dire consequences. This usually happens around really important and difficult Continue reading "Board Effectiveness Tip #5: Have a Lead Director"
This is the final installment in the series “A Startup Takes Flight.” We started by creating a company — the Internet of Wings, a provider of drone-delivered chicken sandwiches that pivoted into general food delivery — and examined some of the most common financing terms entrepreneurs and VC investors discuss. It’s time to get our investors a liquidity event… Read More
Music artist Kehlani is getting into the tech business and she’s tapped Arlan Hamilton’s Backstage Capital for funding. Backstage Capital, the venture capital firm focused on funding people of color, has invested $50,000 in Kehlani’s stealth startup, Flora. The idea with Flora is to focus on health and wellness for the artist’s target audience of people between the ages… Read More
I was on a panel at FounderCon last week with Noah Pittard from Cooley and Service Provider Capital. Something Noah said on that panel was so insightful that it really stuck with me. Someone asked about the types of founders we want to invest in and the types of people we want to surround ourselves with, and the conversation meandered until we were talking about the concept of integrity.
People do stupid things all the time. They make bad decisions. It’s just a part of life. But a bad decision is not an indicator of integrity. How you handle yourself after you make a bad decision is a much better measure of integrity.
The part that really stuck with me was when Noah talked about the moment that inevitably occurs where you first have to answer the question “what happened?”. Those with high integrity quickly take responsibility, disclose uncomfortable
Continue reading "The moment of integrity"
When Google was founded in 1998, its goal was to organize the world’s information. And for the most part, mission accomplished — but in 19 years the goal post has moved forward and indexing and usefully presenting information isn’t enough. As machine learning matures, it’s becoming feasible for the first time to actually summarize and contextualize the world’s… Read More
Ian Rountree, the twenty something captain at the helm of Cantos Ventures, an SF-based micro-fund, is characteristic of a new breed of venture capitalists in tech — a group of small funds looking to go toe-to-toe with some of the valley’s most entrenched seed funds like First Round Capital and SV Angel. Rountree is experimenting with a strategy so antithetical to the venture… Read More
Feedzai is announcing a $50 million Series C this morning led by an unnamed VC with additional capital from Sapphire Ventures. The six year old startup builds machine learning tools to help banks and merchants spot payment fraud. In today’s rapidly maturing world of fintech, Feedzai is trying to thread the needle between turnkey solution and customizable platform. With 60 clients… Read More
If you’re a budding entrepreneur and the VC you’re pitching switches gears and asks you about your exit strategy that’s your cue to get up and leave, says Apple CEO Tim Cook. Read More