Venture Trends Newsletter, Issue #17
I read daily and this newsletter gathers together this week’s most interesting content I saw related to the venture capital and startup ecosystem. I hope you find it useful as well as being a time saver. Feel free to email me at keith@teare.com. The unsubscribe button is at the bottom of this message (inside the shaded box).
This week’s issue includes content from Om Malik, Mark Cuban, Allen Farrington, Mark Suster, Fred Wilson, Tomasz Tunguz, Elizabeth Yin, TechCrunch, The Harvard Business Review, CrunchBase News and many more. Topics are the ones that dominated the week.
- The Inevitable has happened – Om Malik
- Time to reflect (Not Build) – Allen Farrington
- What’s really going on in VC – Mark Suster
- Raising Money is an Obligation, not an Accomplishment – Mark Cuban
- VC Winter – Various Sources
- The Rise of Debt Funding
- Bitcoin Supply – Opposite of Bank Notes – Fred Wilson
I email the newsletter each weekend. There is little or no commentary included, it is the things I found compelling or interesting. You can find more about what I do at archimedes.studio and ubi network
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It’s Time To Reflect
It’s Time To Build reads like it is from the show as well as the place. The thesis is, It’s Time To Build , over which tech and finance twitter collectively lost their minds on account of its dripping inspirational and intellectual brilliance.
What’s Really Happening in Venture Capital, Right Now
Q: Are Silicon Valley VC firms suspending or significantly cutting down on startup investments during this pandemic given the vast economic uncertainties of this time, or is it business as usual? First, come hear from 20+ of the top VCs in SaaS and Cloud for FREE at our next big digital event, the next SaaStr Summit: The New New in Venture on May 27th .
The April 2020 US Venture Capital Funding Report
The average Series A round in the US for April was $10.9M. The median Series A round in the US for April was $8.0M. $902.7M was invested across Series A rounds in the US in April
Opinion: Winter is coming for emerging markets venture capital
And, unfortunately, the health component of the Covid crisis looks like it is only going to get worse in emerging markets over the coming months.As recently reported in the Financial Times, capital outflows across emerging markets have reached a level never seen before, with equity and bond outflows across the 21 large emerging economies of US$95 billion over the last 2.5 months, which is >4x the amount that left in the same period after the start of the global financial crisis in September 2008:
Report: VC Funding In Latin America More Than Doubled To A Record $4.6B In 2019 – Crunchbase News
However, Julie Ruvolo , director of venture capital for LAVCA, told me that even if you exclude SoftBank-led rounds, the region still would have seen record funding last year.Mexico was the second most active market by number of deals and dollars raised (100 startup investments totaling $649 million).
African VC funding to drop by nearly $1B at the end of the year, report says – Techpoint.ng
However, according to AfricArena , an African tech ecosystem accelerator, via its State of Tech Innovation and Investment in Africa report, venture capital will decrease in the remaining quarters of the year.Due to the impact of the pandemic, the report says African startups will receive 40% less venture capital than they did last year.
Canadian Venture capital funding down seven per cent in first quarter to $834 million nationwide
Venture capital funding in Canada dropped seven per cent year over year in the first quarter of 2020, with $834 million raised—but that likely reflects only part of the COVID-19 pandemic’s impact on Canadian venture deals.“We expect to see a significant drop in the second quarter and potentially the third as members have increased their reserve funding for existing portfolio companies,” said Kim Furlong, CEO of the Canadian Venture Capital and Private Equity Association, which compiled the data.
Debt fund managers most bullish on 2020 prospects for secondaries – Setter Capital – AltAssets Private Equity News
Debt fund managers most bullish on 2020 prospects for secondaries – Setter CapitalSecondaries private equity fund managers are tensing themselves for a hefty drop in distributions in the coming months,
What Makes a Great Pitch
This was relatively unsurprising until we dug into the reasons why: The more senior your audience, we learned, the less you should rely on your deck and the more you should expect your pitch to be a conversation, showing your team’s authentic passion for the challenge or problem and their resilience for solving it creatively, together.The more senior your audience, the less you should rely on your deck and the more you should expect your pitch to be a conversation, showing your team’s authentic passion for the challenge or problem and their resilience for solving it creatively, together.
Great analysis on the changes of edtech.
Schools are more about childcare than education.
Digging into #3 – Remote learning is going to be tough for most working parents even if educational outcomes w unlimited personalized content are way better. https://t.co/8Ic0kKqnRt
— Elizabeth Yin (@dunkhippo33) May 6, 2020
Good Leadership Is About Communicating “Why”
Let’s put it this way: If your boss comes to you and says, “I need you take on this additional project on top of your current work load,” what is your first question going to be?When their communications are high-stakes, most of our clients come to us prepared with what needs to happen and how , but they’ve rarely answered the question why .
22 Beaten-Down IPOs That Are Worth a Second Look
Amid uncertainties, private-equity firms are likely to buy up shares in these companies because they are more familiar with them, Emanuel said, which could give these stocks an upward ride.Emanuel listed the companies that have gone public since 2009 with a current market cap above $2 billion and a history of support from private equity or venture capital.
Citing revenue declines, Airbnb cuts 1,900 jobs, or around 25% of its global workforce
The company declined to break down per-country totals for the layoffs in a phone call with TechCrunch, but its memo did note that its staffing cuts are “mapped to a more focused business.”The company has rapidly added capital in recent weeks including two $1 billion tranches of debt, providing extra liquidity as the world came to a standstill, freezing travelers in-place and decimating global travel spend.
With The World On Lockdown, Are Investors Turning To Their Portfolios As A Way To Break The Boredom?
“We find that investors increase their trading activities as the COVID-19 pandemic unfolds, both at the extensive and at the intensive margin,” state the authors of the research, led by Professor Regina Ortmann.According to their analysis, retail investors increased their trading activity by approximately 13.9% for every doubling of COVID-19 cases over the past several months.
Redpoint 8 – Our Eighth Early Stage Fund
We’re both excited and grateful to have the opportunity to continue to partner with early stage entrepreneurs.Much has changed in the world since we announced our last early stage fund in 2018, especially in the last several months, as so much of our day-to-day lives have been reshaped by the coronavirus pandemic.
Not going to try and be marketeer here. @Boldstartvc with @edsim @etdurbin are one of best early stage funds in the business. ?
Whatever they do and say, I follow, listen, take notes, go back on them.
Join me with this one, it will be special. ?https://t.co/WialmWhFY0
— Harry Stebbings (@HarryStebbings) May 5, 2020
“We Know From Past Crises That Some Great Startups and Companies Will Rise”
It is something that we expect from founders we invest in, to always be fast and to know when to iterate so we also take it on ourselves in terms of the meetings, the due diligence, and the financial process.” Sharif said that NFX has already received 2,000 applications both in its Israel and San Francisco headquarters, with several deals being close to completion.
Quantitative Tightening
Bitcoin is tightening its money supply at the same time central banks are loosening it. In the past, halvenings have been bullish for the price of Bitcoin over the medium to long term, but there is no guarantee it will play out that way this time.
The inevitable has happened.
Just as the productivity gains that were expected of big companies became commonplace in mid-sized operations over the past two decades, we have seen the convenience-of-technology flow downwards.Even with worsening economic conditions over the next year or so, these companies are likely to come out big winners.
The “Verticalization” of Zoom
In this first post, we will look at how the verticalization of video conferencing is unfolding today and what the long term impact will be for general-purpose tools like Zoom.Vertical applications are best able to facilitate this human connection in the context of a particular job at hand.
No End of Computer History (Yet)
We have relatively early on branched out into investing in blockchain/crypto with the belief that permissionless data could unleash a new wave of innovation the way that permissionless publishing did with the web. But there is the beginning of another trend that I am extremely excited about: a reinvention of how we do things on computers through new user experiences enabled by machine learning.
After 25 Years of Streaming, the World Can’t Live Without It
That same year, Glaser had a conversation with an entrepreneur named Reed Hastings, who told him of his long-range plan to build a business by shipping physical DVDs to people, and then shift to streaming when the infrastructure could support it.The internet at that point wasn’t robust enough to handle high-quality video, but those in the know understood that it was just a matter of time.
State Bailouts
Cuomo also said that bailing out states was necessary because if we didn’t our economy would crater.The fact is, our private sector is our economy and it would not crater if we didn’t bail out states and forced them into bankruptcy.
The U.S. Is Not Headed Toward a New Great Depression
But it’s a long way from a macroeconomic shock — even a severe one — to a structural regime break, such as a depression or a debt crisis. But it’s a long way from a macroeconomic shock — even a severe one — to a structural regime break, such as a depression or a debt crisis.
I’ve never really reviewed pitches by video before. My quick thoughts:
– ~3 minutes is the sweet spot length
– Main focus should be 1) clear articulation of problem/solution 2) demonstrate some selling acumen
-Simple & authentic > Great production quality— Rob Go (@robgo) May 1, 2020
Mark Cuban: ‘Raising money isn’t an accomplishment, it’s an obligation’
But up top we wanted to share Cuban’s notes regarding which companies should accept Paycheck Protection Program (PPP) funds from the Small Business Administration.“If you think the accomplishment is raising money first, we’re probably not gonna get along,” said Cuban in an Extra Crunch Live interview .
Some Friday thoughts on Why Some Ppl Make So Much Money??
(and some thoughts on solving wealth inequality)…
— Elizabeth Yin (@dunkhippo33) May 1, 2020
Startup Offense and Defense in the Recession
In other words, it should take a large enterprise 3-6 months to move to remote work, understand its financial situation, plan a layoff and buying freeze, and execute it. Getting to 2-3 years may include fundraising, pricing or payment changes with customers, or cutting your own costs via layoffs or other means.
Startup Offense & Defense in Recession (new post)https://t.co/yLBKQZ9lip pic.twitter.com/xppJZogLOn
— Elad Gil (@eladgil) May 1, 2020
4 Top VCs Explain Why Stripe, Square, And Finix Are Going Go Be Big Winners In A Post-COVID-19 World
For payments players, some early beneficiaries include payments automation startups and companies that support e-commerce, said Merritt Hummer, partner at Bain Capital Ventures.”So far, we are seeing COVID-19 beneficiaries emerge in areas including online brokerage, accounts payable and accounts receivable automation, and platforms supporting e-commerce payments,” said Hummer in emailed comments.