Gelt, How to Make Money?

IPO, SPAC, Traction, Story?

This week, ‘That Was The Week’ leads with Ned Desmond leaving TechCrunch after eight years as the boss. On the surface perhaps not the biggest story, but Ned has been the hidden hand of logic and execution at TechCrunch for the past 8 years, in the same way Heather Harde was in the period before. Having been acquired by AOL, then Verizon, the odds on Techcrunch surviving, never mind prospering, seemed low back in 2012 following the sacking of Mike Arrington by Arianne Huffington. But under Ned’s stewardship it has retained and grown its brand, expanded itself globally, grown readers to 20 million a month whilst scaling revenue. The foundation built by Mike Arrington clearly created a surviving brand and impact. Ned cultivated, protected and grew it. He will be missed.

The big reads of the week include a lot on the controversy around how to make money. Filthy lucre has never been a Silicon valley obsession – at least not explicitly. but now Bill Gurley of Benchmark fame has been leading the charge accusing bankers of stealing money from companies by under-pricing IPOs. The response is to suggest direct listings, not using Bankers. Or SPACs (Special Purpose Acquisition Companies). Lots to read and digest as the future is architected through these conversations.

The Tweet of the Week suggests that Y Combinator – a Silicon Valley behemoth – has lost its soul. Discuss. 🙂

Enjoy. And if you do please consider a paid subscription

This week’s video is here:

Reads of the Week

Politics & Technology


  • From Twenty Minute VC to 20VC, Harry Stebbings launches a micro VC off the back of his popular podcast – TechCrunch
  • Leaping From Seed To Series A For Digital Health Startups Proves Difficult – Crunchbase News
  • European Venture Report Q2 2020: Funding Down To 2018 Levels After Record High In 2019 – Gené Teare, Crunchbase
  • Former Atomico and Softbank VC Carolina Brochado has joined EQT to help build its new growth fund
  • Why Covid-19 Has Been Great for SaaS VCs. Or at Least, Their Portfolios. – SaaStr
  • Extension rounds help some startups play offense during COVID-19 – TechCrunch


  • Culture, Entrepreneurship, and Startups – Key Learnings from a Fireside Chat with Elad Gil
  • Video Conversation with Elad Gil
  • Leveraging the Power of Content: How Kirsten Baumberger Helps Companies Tell Stories at Scale – Crunchbase
  • Zoom: Too Big To Buy – SaaStr
  • On Unicorns, Being Nimble and Successfully Pivoting – Startup Grind
  • India, Jio, and the Four Internets – Ben Thompson
  • The Unforeseen Benefits of Online Events – Tomasz Tunguz
  • UiPath’s $225M Round: What Does This Mean For RPA (Robotic Process Automation)? – Forbes
  • The Art of a Cold Email to a Venture Capitalist – Crunchbase
  • When Do I Create A Board? – Fred Wilson

Tweet of the Week

Podcast of the Week

That Was The Week, #28

— Reads of the Week

So long, TechCrunch


  • At TechCrunch, the mission is to help startup founders make sense of their perilous journey by providing breaking news and analysis, startup data and in-person events – all with a sense of fun and endless curiosity.
  • TechCrunch’s leadership is now in the hands of Matthew Panzarino, our editor-in-chief, and Joey Hinson, our director of business operations.

The Goal Should Not Be The New Normal

Feld Thoughts

  • This strategy is a mistake: Congress needs to stop solely backing efforts to restore the old economic reality and focus on how to develop a new one.
  • Going back to the way we were, with some adjustments, is how I interpret the phrase “the new normal.”

Where banks really make money on IPOs

Felix Salmon (

Every time an IPO has a big pop on its opening day, the same tired debate gets reprised: did the investment banks leading the deal rip off the company raising equity capital? The arguments on both sides are well rehearsed — I covered them myself in no little detail, for instance, after LinkedIn went public, in 2011.

Back then, I had sympathy with the bankers:

If the large 7% fee does anything, it aligns the banks’ interests with the issuer’s. If the banks felt they could make millions more dollars for themselves just by raising the offering price, it’s reasonable to assume that they would have done so. I’m sure that the institutions which were granted IPO access are grateful to the banks for the money they made, but that gratitude isn’t worth a ten-figure sum to the ECM divisions of the banks in question.

Today, however, I have to take all of that back. And it’s all thanks to Joe Nocera, who has a great column this weekend, where he uncovers a bunch of documents in one of those interminable securities lawsuits against Goldman Sachs. The documents should have been sealed; they weren’t. And now, thanks to Nocera, we can all see exactly where Goldman makes its money, when it comes to IPOs. (It’s fantastic that he put those documents online, although it’s hard to read them in the browser; here’s the download link which the NYT weirdly removed from its own site.)

Why the Day One IPO ‘Pop’ Is Overhyped

Marker — Business News and Articles for Startups and Leaders – Medium

  • For example, say a company sold 5 million shares to institutional investors at $20 per share, raising $100 million in its IPO and then ended the day trading at $30 per share (seeing a 50% pop).
  • If the closing price was a lot higher, then the company was diluted (sold more shares than it needed to), more than it should have been or raised less money than it could have otherwise since it issues shares to investors in the IPO at less than what the market valued the company’s shares.

Back to SPAC


  • All three stakeholders of a SPAC IPO (companies, lead investors, banks) can have equal or better experiences with a SPAC than a traditional IPO.
  • Share Witty Wealth Today’s post is the second of a series on special purpose acquisition companies (SPACs).

Venture capital firm Ribbit plans $600m SPAC

Yahoo Finance

  • The plans are coming together as a host of other venture capital firms consider forming Spacs or pushing their start-ups into deals with the shell companies, which have historically suffered from a lack of transparency and associations with short-term investors, such as hedge funds.
  • Ribbit Capital is forming a special purpose acquisition company to target fintech businesses, in a sign of the growing interest in blank-cheque vehicles among Silicon Valley investors.

What you need to know about fundraising this year

Sapphire Ventures Perspectives

  • The gross majority of funds that have raised year-to-date have established brand names, market positions, LP bases, maturing track records, and in many cases realized returns, as well as critical experience in weathering downturns.
  • By Beezer Clarkson, Managing Director, Sapphire Partners We’re a little over half-way through 2020 and COVID-19, rollercoaster equity markets and record unemployment rates have dominated the 2020 fundraising narrative.

Traction Creates Opportunity

Blog – NextView Ventures

  • The beautiful thing about traction is that it creates new opportunities.
  • A company that has grown revenue or users by XXX% isn’t valuable just because it’s bigger, but because that traction has unlocked other things that make the business more valuable as well.

— Politics & Technology

Impact Investing Won’t Save Capitalism

Harvard Business Review

  • We need to reform the rules that govern how our economy works — and impact investors have a critical role to play.
  • Impact investors are right that it is sometimes possible to overcome these barriers, and it is sometimes possible to marry competitive returns and social good by tackling actions “below the line,” as they have in small energy efficiency or renewables investments.

Thoughts on Sourcing Black Companies and Entrepreneurs

Brad Feld

I recently was in an email thread where a Black founder had a powerful and clear response to the question from one of her corporate partners. The question was:

How can our (the corporate partner’s) team better support diversity in our work, particularly in our sourcing, diligence, and onboarding efforts?

The entrepreneur responded with a long explanation that was a brilliant and extremely helpful perspective for me. It follows.

Twitter’s Jack Dorsey talks hack response and hate speech during P&G forum

Latest News – Ad Age

  • More broadly, Dorsey said Twitter is looking to remove hate speech and address other problems by thoroughly reviewing and improving communications around its terms of service, which he said will be an ongoing process.

A new forecast says the world’s population will peak at 9.7bn in 2064

Graphic detail.

That is well below the UN’s latest projections

— Venture


  • Stebbings decided to start the podcast use the money it made off advertising around it to help cover his mother’s medical bills.
  • Having a popular podcast that highlights interesting investors and startups turns out to be a good way of networking to build a fund.

Leaping From Seed To Series A For Digital Health Startups Proves Difficult

Crunchbase News

  • The leap from raising seed funding to landing a Series A was difficult for RxRevu CEO Carm Huntress , as it typically is for many in the digital health space.
  • “The first wave of digital health companies were started from the medical side, but many failed because of a lack of leadership, while some who started from a tech background couldn’t figure out a go-to-market strategy, and it fizzled out,” said Cheryl Cheng , general partner at BlueRun Ventures , in an interview.
  • “We do hold every account to the same terms of service,” Dorsey said.

European Venture Report Q2 2020: Funding Down To 2018 Levels After Record High In 2019

Crunchbase News

  • The majority of funding in the second quarter of 2020 in European companies were rounds below $100 million at 72 percent.
  • That count is down by 9 percent when compared to the first half of 2019 when 991 startups raised a round of $2 million and over.

Former Atomico and Softbank VC Carolina Brochado has joined EQT to help build its new growth fund


  • Carolina Brochado, the former Atomico partner and most recently a partner at Softbank Vision Fund’s London office, has joined EQT as part of its plans to launch a new fund dedicated to growth-stage investments, TechCrunch as learned.
  • According to multiple sources, Brochado is part of a new growth fund team at EQT that will sit between its existing earlier-stage EQT Ventures and the more majority ownership-oriented EQT private equity.


  • It’s a bit non-obvious, but let’s take an example of a hypothetical VC portfolio of 10 companies (to keep it simple):
  • But third, and this one is a bit nonobvious — power laws mean the “Covid Beneficiaries” in most VCs’ portfolios more than outweigh the Covid Impacted and Covid Decimated .

Extension rounds help some startups play offense during COVID-19

Fundings & Exits – TechCrunch

  • For example, a recent flurry of extension rounds from Silicon Valley’s hottest startups like Stripe and Robinhood seem to signal that the investment type has suddenly become cool.
  • In past times, for example, raising consecutive rounds from the same lead investor was often perceived as a negative signal; why couldn’t the startup find a new, different lead investor?

— Startups

Culture, Entrepreneurship, and Startups – Key Learnings from a Fireside Chat with Elad Gil

Neeraj Mathur

Elad Gil does not need an introduction. As an operator, Elad worked at some of the top Silicon Valley companies, including Twitter and Google. With his battle-tested and honed knowledge in startups and ideas, he has invested in some of the most amazing companies of our time, including Airbnb, Flexport, Coinbase, Gusto, Stripe. So, when Lunchclub, an AI-based networking solution that I had been using since Nov 2019, put together a fireside chat with Elad, I had to attend. To my delight, the Lunchclub team asked me to be a panelist so that I could directly ask my question

Leveraging the Power of Content: How Kirsten Baumberger Helps Companies Tell Stories at Scale

Blog – Crunchbase

  • And that she did: After moving to New York, she built her company, a platform that facilitates the production UGC on demand and at scale via micro influencers, to six figures and profitability in only one year.
  • helps brands produce UGC assets that move the needle across their marketing channels, from organic social to acquisition, their website to print advertising while also providing the lift associated with traditional influencer amplification.

Zoom: Too Big To Buy


  • Q: Who will acquire Zoom: Amazon, Oracle, Adobe, or IBM?
  • Google is now worth $1 trillion, and has a history of making big bets that paid off.

On Unicorns, Being Nimble and Successfully Pivoting

Startup Grind – Medium

  • Bannon says she believes some of the most innovative ideas are going to come from a very different looking group of founders.
  • The idea is allowing female and underrepresented founders to pitch seven funds at once,” Bannon says.

India, Jio, and the Four Internets

Stratechery by Ben Thompson

  • What is new is the increased splintering in the non-China Internet: the U.S. model is still the default for most of the world, but the European Union and India are increasingly pursuing their own paths.
  • The U.S. government collects the vast majority of taxes from these U.S. companies, including from revenue generated abroad, and also sees the overall U.S. view of the world exported via U.S. tech companies, while also having access to the data of non-U.S. citizens.

The Unforeseen Benefits of Online Events

Tomasz Tunguz

In this era, virtual events have replaced IRL events. Virtual events have many obvious benefits. No hotels, no event venues, no catering, no ensuring guests are in the right city at the right time. But there are unanticipated benefits that are only now coming to light.

Many of our portfolio companies have experimented with virtual events quite successfully. We have done the same with our Office Hours program. These are some of the things that we have observed running vevents (may I coin a new word for them?).

First, the number of attendees increases by a factor of 5-10x. Vevents amplify both registrants and attendees by similar multiples. An IRL event of 50, when transitioned online, will swell to 250-500 registrants. Curiously enough, the falloff rate between registration and attendance mirrors in-person events. I wonder what that says about human behavior.

UiPath’s $225M Round: What Does This Mean For RPA (Robotic Process Automation)?


  • UiPath is the leader in the RPA (Robotic Process Automation) space, with ARR (Annual Recurring Revenues) of more than $400 million.
  • Yet companies like UiPath have innovated RPA systems, such as with machine learning, computer vision, process mining, intelligent OCR (Optical Character Recognition) and NLP (Natural Language Processing).READ MORE

The Art of a Cold Email to a Venture Capitalist

Blog – Crunchbase

  • Option 2: Validation point, growth stat + details of ask ( MetaProp-backed gun detection AI – 10M users in NYC – raising seed ).
  • That is what it’s like sending a cold email to a venture capitalist (they spend more than 0.4 seconds reading, but it’s not too far off).

When Do I Create A Board?

Fred Wilson – Union Square Ventures

I’ve been asked this question a bunch in the last few weeks in response to my post about more diversity on Boards.

My answer to this question is simple.

A Company should have a Board the day it is formed. The Board should contain one Founder (or possibly two) and at least two independent Directors.


%d bloggers like this: