Category: Fundraising

The Secret to Raising Capital for Your Company or VC Fund with Jason Kirby of Thunder.vc


This post is by MPD from @MPD - Medium


I’m super excited about this week’s episode because it hits close to home. If you’ve listened to the pod before, you’ve probably heard me mention the passion project I’m involved with, a platform that’s helping to democratize access to capital called Thunder. On this week’s episode I sit down with Thunder’s Co-Founder and CEO, Jason Kirby.

To give a bit more context, Thunder is a company that’s come out of the Interplay Foundry, the part of Interplay that builds companies from scratch. Jason is the incredible CEO we brought in to build and grow Thunder.

Thunder is a platform that connects founders and VCs by utilizing a double opt-in, AI-based matching protocol that not only creates relevant deal flow for all parties, but also helps everyone save time and avoid spam. We started this with the mission of helping founders that lacked a strong network raise capital.

Jason is a serial entrepreneur and has done an incredible job so far. Not only has he advanced the business, but he has also advanced the vision. I think this company is going to materially improve the way capital flows in the alternative asset classes such as venture capital. I’m so excited to watch what he does and help support him. Be sure to check it out at thunder.vc.

During our chat we talk all about how Thunder works, how it helps both founders and investors, why it’s important for platforms like it to exist and much more.

Listen via your preferred platform here.

Show Links (Read more...)

Your cloud data needs a reality check: our investment in Cyera


This post is by Philippe Botteri from Cracking The Code


 

Yotam Segev (left) and Tamar Bar-Ilan (right), cofounders of Cyera


The complex equation of data reality


With AWS, Azure and GCP growing 40-50% YoY at massive scale (AWS’ run rate is more than $70B!), it’s fair to say that migration to the cloud is in full swing. That said, some large sectors like financial services and healthcare only started to migrate their core workloads and data to the cloud more recently. With less than a third of workloads currently migrated, there’s still a long way to go*.

 

One of the benefits of the cloud is that it gives development teams more agility and flexibility, but with increased flexibility comes the downside of a loss of control and visibility. This is a particularly acute issue for data, which is the most valuable and sensitive asset of many businesses.

 

On top of the move to the cloud, the volume of data continues to grow exponentially. Latest estimates are that the 65 zettabytes (1 zettabyte = 1 billion terabytes) of global data in 2020 will have nearly tripled by 2025**. With digital transformation accelerating and new AI based applications being created and perfected every day, this growth isn’t set to stop anytime soon. Add to this the constantly increasing compliance and privacy needs, including GDPR and CCPA, and the growth of cyber threats, and you end up with the following equation:

 

Data reality: 
cloud migration x growing data sets x increased compliance x cyber-attacks 
= big headache for CTOs (Read more...)

“To build a community, you need to focus much more on the user than on the buyer” – Snyk’s Guy Podjarny


This post is by Philippe Botteri from Cracking The Code


 


Cybersecurity unicorn Snyk was founded in 2015 with the mission to help developers make their code secure. Just a few years on and Snyk has evolved from being an open source vulnerabilities scanner and to becoming the world’s first developer security platform that start-ups worldwide can build upon. Snyk customers and users collectively have run more than 300 million tests in the last 12 months and fixed more than 30 million vulnerabilities in the last 90 days.

 

As the company announces its $530 million Series F at a valuation of $8.5 billion, it’s clear that Snyk is driving the industry’s shift to a new developer-centric approach to security and is now the undeniable leader in this space. In 2021 so far, the company has:

 

  • Increased annual recurring revenue by 154% year-over-year
  • Grown its customer base to 1,200+ companies, including established enterprise leaders and emerging hypergrowth technology companies
  • Hired and onboarded 320 employees, projecting 800+ by year end
  • Delivered more than 40+ new product features
  • Acquired FossID to expand license compliance and C/C++ capabilities


I sat down with co-founder Guy Podjarny to get his tips on building a community, how to deal with hypergrowth, the importance of having people across multiple offices and continents feel like one team and more…

 

Let’s start with your entrepreneurial journey. You’re a serial entrepreneur - some of your companies have been acquired and Snyk’s a great success. What attracted you to entrepreneurship, coming out of the 8200 Intelligence Unit?

 

I’ve (Read more...)

The (common) situation where VCs actually prefer to make less money



Why do founders often own so little of the companies they create? It’s often because of the incentives of their investors, pressing them to raise evermore money.

Consider a Tale of Two Startups, VC edition:

Here’s the riddle, oversimplified:

Company #1: A VC invests $1, and 10 years later, receives $1,000. Great investment!

Company #2: A VC invests $1 in an identical company, and 10 years later, receives $800. (Still great, but an inferior return to company #1.)

Still, many VCs would prefer company #2 over company #1. Why??

Imagine Company #1 only ever raises that first funding round, and Company #2 raises more money on an ever-higher valuation every 18 months like a clock. The VC can use Company #2’s example to (a) promote their individual career within their firm, because the fundraises are the closest thing to proof of success that venture firms have prior to exit, and (b) raise additional funds for the firm during the 10 years before exit (“look at our returns!”). So, in practice, Company #2 — despite the lower return — can be more valuable to a VC (both personally and as a firm) than Company #1.

Of course in Company #1, the founders might own 80%; in Company #2, they might own 8%.

So when your investors implicitly assume that your goal should be to raise more money on a higher price as soon as possible… beware! That may be in their interest more than yours.

As Alan Warms points out, there are other advantages to founders of Company #1 — avoiding losing control of (Read more...)

Salto – Bringing DevOps to Cloud App Configuration


This post is by Philippe Botteri from Cracking The Code



Team Salto in their Tel Aviv office

Around 10 years ago, I was lucky(!) enough to have the task of configuring Salesforce for our London team. While a great tool for many organizations of all sizes and across all industries, “lightly” customizing Salesforce for Accel’s internal use cases was neither a quick nor fun experience. Far from it. Fast forward to today, and the pain point is still here, but we now have a technology team to implement and run our tech stack, which includes, Salesforce, Netsuite, Slack, and many others. And while Salesforce has made some improvements when it comes to user experience, it still requires quite specific knowledge of its rules and syntax.

You might well ask: why is this more of a problem today than it was a few years ago? The answer is the cloud. As cloud computing and applications have become more prevalent in every size and type of company, configuring these applications remains a pain point that business operations and IT departments know all too well. And the configuration headaches don’t stop following the initial integration, they continue over applications’ years of use. To give some examples, Salesforce, NetSuite, HubSpot, ServiceNow, Workday, Coupa, Zuora, Workato, Marketo, Jira, Zendesk, Oracle, SAP Ariba and SuccessFactors, MSF Dynamics, SharePoint, and many others, form the core infrastructures of large and small companies worldwide. And yes, they all need to be configured to different degrees in order to address specific business needs. Some companies have up to 250 of (Read more...)

Some Notes on Fundraising



Over the last two decades I have helped many companies raise venture capital rounds. Here are some of the lessons I have learned from this.

If your company is growing like crazy you will have an easy time fundraising and you can ignore pretty much everything that follows. Put differently, what I am writing here is for companies where the ability to raise money is somewhat in question.

Fundraising is selling. You are literally getting money in return for selling a part of your company. Because fundraising is selling, many of the lessons from how to be effective at sales apply directly to fundraising. This starts with the crucial need for qualification of who you are talking to. Build a broad funnel so that you can qualify hard. Otherwise you will wind up spending a lot of time with VC firms that will never get there. How do you qualify firms? Through an initial conversation where you figure out such things as do they seem to know the space you are operating in? What is their process and are you talking to the right people?

The second crucial insight from selling is that your goal is to get from push mode into pull mode as quickly as possibly. What do I mean by that? You want to stop talking and let the investors ask questions. That means the investors are engaged and ideally are starting to sell themselves on the opportunity. A bad pitch is one where you do all (Read more...)

Why So Many Small Emerging Managers Don’t Use Placement Agents


This post is by David from David Teten's blog


The pros and cons of choosing a placement agent for small funds

It would make life a lot easier for emerging managers if they could outsource the entire fundraising process. But can you?

Empirically, few small emerging investment managers hire placement agents, particularly in venture capital. And even the firms that hire a placement agent almost always still have to run their own internal process. 

Homebrew doesn’t report hiring a placement agent for their Fund I, despite (or because of) a well-pedigreed team. Greycroft in 2010 also had an experienced team, but didn’t either. Instead, they hired an outside assistant – not a placement agent – to help in the process. 

As Greycroft said in an essay: “Since we were a small fund, it would have been overwhelming to us and our small administrative staff to set up the meetings and follow ups, fill out questionnaires (which for the most part fall into a dark hole), and respond to the myriad of questions which occur during the due diligence process. Although not a placement agent charged with raising the money, this person was an important and critical member of the team and was a key factor in helping us to keep track of where we had been and where we were going – ‘If it’s Tuesday, it must be Belgium.’ ”

Greycroft’s results give you a sense of the complexity involved: The firm said it  had 515 contacts with potential LPs; roughly 250 passed for various reasons and 100 were non-responsive. (Read more...)

Cheat Codes for Raising Capital from Venture Capitalists


This post is by David from David Teten's blog


We love founder(s) who can say any of the following:

Mindset 

  • “Not sure, but we’ll get back to you shortly”
  • “We studied all of the past players who worked in this space, and here’s what we learned…”
  • “We accomplished something difficult that most people couldn’t.” Even if it’s not in a business arena–e.g., you ran a mile in 4:30–this shows ambition and focus.
  • “Only the paranoid survive, and we’re paranoid.”
  • “We have a history of being willing to defer gratification. Examples: ____.” Being a founder is not for the faint of heart.
  • “There are some unknowns in our vision. Here’s our plan for researching them.”
  • “We have a history of moving very quickly.” Note this applies in real time. If we meet you over a period of a month, we’ll notice what happens during that month.

Team

  • “We hired a coach to help make us a world-class team.”  
  • “One or more of our past coworkers are joining us in this new business, and working for sweat equity.”
  • “One of our past colleagues / managers is investing.”
  • “We want you to invest because we think you have resources that can address some of our biggest challenges, which are…” 

Experience 

  • “We think almost everyone else in the sector is missing a key insight we have earned, a secret. We earned our knowledge because ____. When we talk about our secret with other industry players, they say ___.”
  • “We built a similar business in the past, and here are our (Read more...)

Free Money for Startups


This post is by David from David Teten's blog


We have added a large new section to the Versatile VC website with some of the best sources of free money for tech-enabled founders. That’s free as in “free beer”, not free as in “free speech”.

Sign up for our mailing list to learn about new free resources.


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How to Find the Right Online Communities


This post is by David from David Teten's blog


The user experience in the big, ungated social networks is getting steadily worse: spam, bots, fake news. One result: I think we’ll see people spending more and more time in gated online communities. Particularly in a time of social distancing, when people can’t meet one another in person.

But…how do you find the right online communities that are worth your while? Filled with conversations worth having and people whom you’d like to meet?

First, I suggest search within the major online community platforms for your industries and functions of interest, in particular: 

Second, I suggest using some of the search engines for finding online communities:

Third, look on an internet search engine for all combinations of words from each of the two columns on the right below, e.g., “New York software engineers group” . 

CategoryYour keywordsSynonyms for community
Location (or leave blank)“New York”“alliance”, “association”, “community”, “conference”, “council”, “forum”, “institute”, “network”, “organization”, “retreat”, “society”, “symposium”
Target industry“fashion”, “health care”
Target function“Software engineers”

 

Scott Allen, CEO, TheVirtualHandshake.com, and my coauthor, said, “There are actually a lot of great industry/peer groups on Facebook. Just also a lot of noise, and discovery can be harder. But they’re typically far more active, more closely moderated, and supportive than LinkedIn groups. Austin has some great examples:

https://www.facebook.com/groups/austindigitaljobs/

https://www.facebook.com/groups/austinstartups

https://www.facebook.com/groups/freelanceatx

Facebook is (Read more...)