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Is Diversity the New Lean-In Movement?

Is Diversity the New Lean-In Movement?

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 Diversity/inclusion is definitely the catchphrase of the day and having been in the industry since the Web 1.0 days, when we’d attend conferences and would never find a queue at the women’s loo ever, while at the men’s loo, the line would snake around corners. Not so much when Web 2.0 hit and cheers to that, despite the wait we then encountered: the industry was becoming more gender-inclusive at some levels and there’s a start, anyway, even though not all companies seemed to have gotten the memo, or the message, or didn’t quite understand that it’s not all about numbers alone: Black former employees sue Google for racial discrimination.

 

The pendulum does have a way of swinging from one extreme to the other before righting itself at the midway point, or so one would hope, and so it seems to be going  with diversity and inclusion, Hollywood/the movie industry being an extreme example (Are the Oscars Over?). Viewership of the Academy Awards has been way down in recent years, and despite the fact that many entertainers accepting their awards or presenting use the moment as a way to air their pollical views, the Academy has somehow decided that it’s all about diversity/inclusion, or the lack thereof. Read More...

W-A-T-E-R

W-A-T-E-R

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Image by congerdesign @Pixabay

It took ‘Miracle Worker’ and teacher Anne Sullivan a long time and a lot of effort to get through to a blind and deaf young Helen Keller. An exasperated Sullivan finally did succeed. The first word that made an impact and succeeded in helping the girl to understand the relationship between words and everything in her world was ‘water.’

With all due respect, it’s more or less the same with many first-time entrepreneurs when it comes to constructing their investor pitch decks and/or pitching. So, we’re going to spell it out for you.

We know you know the information that needs to be included, in no particular order: problem, solution, differentiators, market size – total addressable market (TAM), sample addressable market (SAM), sample obtainable market (SOM), go to market strategy, traction/partnerships, competitors, financials, team et al. 12-15 slides. Done. Read More...

The Sili-CON Game

The Sili-CON Game

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image by Leuchtturm81 at Pixabay

What captured the attention of the Twitterverse of late was the thread from Bolt founder Ryan Breslow (@theryanking) who called out the Silicon Valley Mob. We quote: “two forces have the most power in Silicon Valley. And like… tenfold more than anyone else. Their names: Stripe and YCombinator. The kicker → Their power is in how they work together. Stripe is the darling child of Silicon Valley. Early to YC (YCombinator), Stripe made payment processing APIs easy and signed up all their YC batchmates to use their product. The “official payment processor for YC”, Stripe became a HOT company. Sequoia, the most powerful VC firm in the world, went all-in. Their position today is upwards of $20-$30B in Stripe stock.

 

By the Numbers

“Three forces combined quickly: 1/ The most powerful VC firm in the world. 2/ The most powerful startup accelerator in the world. 3/ The most powerful startup in the world, with the help of #1 and #2.” Read More...

Where in the World Is Travis Kalanick?

Where in the World Is Travis Kalanick?

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If your reaction to the above was ‘who cares?,’ do not pass go, do not collect $200. How can we so quickly forget one of the seminal unicorns of Web 2.0.

Theranos founder Elizabeth Holmes was convicted of four of the 11 counts of fraud brought against her (three of the charges were dismissed and the jury was deadlocked on the other four, so it may not be over yet), and while she may serve (a reportedly fairly negligible amount of) jailtime, did this send chills through Silicon Valley, which at this point has become a generic term, like ‘Band-Aid’ and ‘google,’ considering that Report: Californians Leaving for Texas So Rapidly, U-Haul Ran Out of Trucks?

Will this verdict be a wake-up call? The Elizabeth Holmes verdict: Silicon Valley’s reckoning or a single bad apple? Will the guilty verdict change “fake it ’till you make it” culture?, the Mercury News asked. “Experts say the guilty verdict and the potential prison sentence it carries are sure to send a chill down the spines of entrepreneurs and investors — especially in the health care field — and prompt them to tread carefully. But it may not be the major reckoning that some have been clamoring for in Silicon Valley, where criminal charges remain rare and money continues to flow.” Read More...

The Video Revolution in the Age of Remote

The Video Revolution in the Age of Remote

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While we are well aware of the fact that people have been untethering from television for quite some time, viewership has also been plummeting when it comes to the various mainstream news services. The numbers are in a free fall.

While the term ‘fake news’ has been bandied about ad nauseam and has become so much part of the patois that social media also affixes ‘potential fake news’ labels on tweets and posts that are not in lockstep with the media talking points. But no matter what’s reported, note to self: who can’t grab a photo or video with their phone these days? What the media reports, thanks in no small part to editing and green screen, and what onlookers post can sometimes seem like alternate realities and given this, even the major news outlets no longer have a monopoly over the message.

Publications are no longer necessarily authentic in their reporting, either. Prior to the last election, we’d do our usual perusal of tech articles, and noticed that the reporters always added a political aside which would have nothing to do with the story itself or the technology that was being featured. We began unsubscribing: How could we trust a reporter who was writing about, say, a dating app, then slipped in, say, a climate change aside, which had nothing at all to do with said app? The trust was gone.  So long, and thanks for all the fish. Read More...

Investors in the Hot Seat

Investors in the Hot Seat

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Image by mohamed Hassan from Pixabay

We work with and/or coach entrepreneurs all the time, and recently realized that many founders have no idea how the VC model works, meaning how and why VCs deploy funds – and make decisions – the way they do. So we’re going to shift the perspective to help you to better understand the process.

You go to investors because you need capital in order to get your company to the next level. Time to think about VC firms as companies as well, because they are. Some of them are large companies, re have a bigger war chest of funds to deploy, but truth be told, the majority are more akin to SMBs. Where does the money come from for the funds? Family offices, high net worth individuals, strategics (eg companies/corporations aligned with the investment vertical or thesis of the fund) or institutional investors (pension funds, university endowment funds, sovereign wealth funds, etc), and the funds manage their investments. The fund’s investors invest in specific funds for various reasons: the expertise of the team, the fund’s track record, their spidey sense, alignment of focus, etc.

Like the VCs who invest in your company, those LPs expect a return on their investments. If the fund fails to do that, well, they’re going to have a harder time attracting investors themselves when they go to raise their next fund, or to put it into startup terms, their Series A, B, whatever. Read More...

Where Founder Pitches Go Wrong

Where Founder Pitches Go Wrong

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Heads up! This is a great time to start a company. According to NPR, there’s an Unexpected Boom In Startups. “Most of these new businesses are seizing opportunities created by the weird coronavirus economy — an economy where people don’t really want to do stuff face-to-face anymore… Economists have a term for this…”creative destruction.”… Harvard University economist Joseph Schumpeter… described it as a process of “industrial mutation … that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” He placed it at the center of capitalism, arguing that it was a force that made capitalism much more innovative than socialism.”

We know that many of you are working on newcos. We hear this from you all the time and our online investor breakfasts are certainly proof of it: everyone briefly pitches and everyone has a newco. We receive your decks and executive summaries and, since we do investor breakfasts semi-monthly, we must know all of the investors (we do know literally hundreds of them), so we’re often asked can we please send out your enclosed deck to the investors for whom we feel it might be appropriate? Happy to! But we get paid for our time. Read More...

The Broken VC Model: Suggestions for a Hollywood Ending

The Broken VC Model: Suggestions for a Hollywood Ending

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Image by skeeze from Pixabay

This just in: Twitter Co-Founder Ev Williams Believes All Startup Advice Is Wrong (Yet it is valuable anyway).

“Why is it wrong?…Deep down we know we can’t possibly apply everything we read and often even if we could, we shouldn’t.”

Ditto to investors. We often hear that investors look for newcos focused on big markets (fair enough – everyone wants a unicorn/substantial ROI); were founded by successful serial entrepreneurs (again, fair enough: less handholding; potentially lower risk/known entity). Still, again, they can’t possibly apply everything they hear or read and even if they could, they shouldn’t. Which may contribute to why the VC model is broken. Read More...

Trends in Funding: The Silicon Valley Climate Change

Trends in Funding: The Silicon Valley Climate Change

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Image by Tumisu from Pixabay

If you want to know what investors are thinking/looking at these days, a must-read is Elizabeth Yin’s (@dunkhippo33 @HustleFundVC – VC investing in hilariously-early founders) recent series of tweets:

“1) At the early stages (call it pre-A or the whole “seed range”), I’m seeing lots of bifurcation. On one hand, in the Silicon Valley, for some founders, it’s never been an easier time to raise. 2) These founders, largely serial entrepreneurs/pedigreed founders (based on schools & work), are highly sought after even at the pre-seed stage. 3) So with these founders (mostly in SF), I’m seeing massive party rounds — like $3m-$5m seed rounds. Sometimes higher! No product / no traction. My friend – fantastic founder – raised $8m recently. $30m+ post-money, no product. If you have this background, raising is EASY. 4) For non-pedigreed founders, if you are running a SaaS company & have some rev traction, also pretty easy to raise. VCs have gone gaga over SaaS in the last 2 months. They think predictable cap efficient companies are the way to go in light of issues at unnamed marketplace cos 5) And then, there’s everyone else. Still HARD to raise money. Even in the Bay Area, if you don’t check said boxes above. Outside the SF Area, even harder. 6) So we have a weird Goldilocks & the 3 bears situation. Some companies are really HOT. Others are really cold. The range of valuations are insane. Everything from < $1m post valuations to $30m+ for PRE-SEED! 7) The press mostly writes about the hot deals. After all, no one wants to read about someone’s poor fundraising situation. So, now everyone thinks Silicon Valley is littered with gold. The reality is that SF mostly has poop on the ground. 8) Then there’s the downstream. The later stages. In 2020, I think raising a series A or a series B will become incredibly challenging. (fundraising always is, but even more so than last yr). 9) Why? VCs all of a sudden care about profitability. Your co still needs to be growing at 30% MoM AND also profitable!  (unclear why you need VC in this case but that’s beside the pt 🙂 )”

Actually, that is the point.

We know that raising funding is considered by many an entrepreneur to be a trophy of sorts, or a even proof of concept. Great! If you need the confirmation, go talk to investors – but bootstrap as long as you can. As an investor pointed out at one of our breakfasts, once you’re on the VC treadmill, there’s no getting off. And it’s not free money: You’ll be under more pressure and scrutiny that comes with it, especially in this funding climate. Read More...