Everybody’s Hustling

That Was The Week, Newsletter from Keith Teare. #31

How to raise funding

This week’s talking points draw from a wide range of authors and topics. There really is no theme, so instead I want to draw attention to some of the most remarkable and interesting content.

A few weeks ago I posted “How to Tell Your Startup Story“. This week Elizabeth Yin – a founder at Hustle VC – pointed to the story of how she and her partners raised their first $11.5m fund. Anybody raising funds – whether for a startup or to become an investor should read it. Bottom line – be prepared to have a compelling story and work very hard to sell it.

Om Malik is a regular in ‘That Was The Week’ and this week he has 2 pieces. The first looks at why Apple may be the real victim of the attack on Tik Tok. He shows just how integrated Apple is in China and how vulnerable it is to any reprisal. But the bigger point udent this is just how integrated the world economy is and why there can be no winners if the US should seek to fight the inevitability of the rise of the Chinese Economy as a global giant.

Om also writes a great piece on the changing meaning of work in light of the rise of the gig economy.

Globalization really should be better understood and the article from the Internet Governance Project is a good thought piece. Stop The Internet, we want to get off illustrates the mediocrity in the thinking of those who seek to preserve digital national borders.

Finally, Albert Wenger writes about Marxism from the point of view of the future organizing principles of the earth. His attempt is to distance himself from Marxism whilst showing an understanding of its relevance. he sees poor capitalism as likely to lead to a revival of Marxism and warns against that. I will leave you to watch the video to see my response.

Enjoy. And if you do please consider a paid subscription

This week’s video is here:

Reads of the Week

Politics and Technology



Podcasts of the Week

Tweet of the Week

Reads of the Week

US-China Tech War: Apple is in the eye of a hurricane.

On my Om

  • At last count, the company clocked revenues of $43.7 billion from China in 2019— roughly 17 percent of its 2019 sales.
  • Barry Ritholtz, recently noted that “Four industry groups — internet content, software infrastructure, consumer electronics, and internet retailers — account for more than $8 trillion in market value, about a third of the S&P500 and a quarter of total U.S. stock market value of about $35 trillion.”

3 Lessons from Chinese Firms on Effective Digital Collaboration

Harvard Business Review

  • The authors propose three models for collaboration that offer useful lessons for leaders all around the world: the “Data Sharing” model, in which companies leverage digital data infrastructure to more freely share information; the “Coalition-Building” model, in which a consortium of public and private entities work together towards a shared social goal; and the “Superapp Platform” model, in which companies share tools and resources for common benefit.
  • We are of course not advocating that Western companies abandon their traditional vertical M&A-based relationships; rather, we are suggesting that during these times of crisis they should consider complementing them with more horizontal alliances predicated on data-sharing , as this approach might help them create more value than they could on their own.

What Work

On my Om

  • Putting the news, and the legal posturing of Uber and Lyft aside, the judgment and its possible impact on other gig-economy companies that rely on independent contractors will be a quagmire.
  • How are people who are going to have no jobs, going to be rethinking their future and finding work?

Marxism Remains a Dangerous Idea

Continuations by Albert Wenger

  • So the central idea that matters and is worth discussing is that of class struggle between labor and capital that can ultimately get resolved only through worker control of the means of production (and by extension the abolishment of capitalists).
  • Now I should be quick to point out that the same governance problem also exists in capitalism, but in theory bureaucratic excess is checked there by the functioning of markets.

The Energy Revolution is (Finally) Here

Version One

  • As someone who spent the better part of the last decade building startups in the solar and energy efficiency industries, I can attest that there are indeed many challenges to building a scalable cleantech business: it’s inherently more difficult to move atoms than bits, energy markets are heavily regulated and vary greatly from geography to geography, and upfront capital costs are generally expensive and require sophisticated, patient project finance.
  • In the span of just 10 years, we’ve seen the cost of solar go from a fringe, do-gooder energy source to radically cheaper than “conventional” electricity production.

Facebook groups trading fake Amazon reviews remain rampant

Financial Times

  • “Our research shows that review-trading groups continue to thrive on Facebook, leaving shoppers at huge risk of being duped into buying products on Amazon that have been boosted by fake reviews,” said Natalie Hitchens from Which?.
  • Facebook groups enabling the creation of fraudulent Amazon reviews are thriving, seven months after the social network assured the UK’s competition regulator it would curb the behaviour.

Where Will the Next Billion Internet Users Come From?

Visual Capitalist

The majority of countries with lower rates of internet access are in Asia and Africa. Here’s a look at the top 10 countries with the highest numbers of people not connected to the web:

*Note: Rankings only include countries/territories with populations over 50,000.

  • Despite its widespread use, a significant portion of the global population still isn’t connected to the internet, and in certain areas of the world, the number of disconnected people skews towards higher percentages.
  • While India, China, and Pakistan have the highest number of people without internet access, there are countries arguably more disconnected.

How I raised my $11.5m VC fund

Elizabeth Yin – Hustle Fund

We are Hustle Fund from Hustle Fund on Vimeo.

I’ve written before about what it’s like to start a new venture capital fund.  But, a lot of people have asked me about how we actually raised it.  Surprise surprise – we ran our fundraising process using all the fundraising tips I give away on this blog!

Politics & Technology

Trump and Pompeo: Stop the Internet, we want to get off

Internet Governance Project

On August 5, 2020, the U.S. mounted a systematic attempt to splinter the global Internet. It released a policy that tries to leverage US information services providers to force the rest of the digital economy to indiscriminately exclude Chinese businesses. The US “Clean Path” initiative, announced in April of this year, was designed to pressure European carriers to avoid purchasing 5G equipment from Huawei and ZTE, in order to establish China-free communications paths between the US and its embassies in foreign countries. The new initiative does not seem to be confined to protecting government communications, however. Pompeo claims to be protecting “our citizens’ privacy and our companies’ most sensitive information” by eliminating interoperation with any and all Chinese providers.

Secretary Pompeo’s broader “Clean Network” initiative is a watershed in US Internet policy. It embraces national barriers to Internet connectivity. It signals to every nation, not just China, that any foreign internet-based service provider, including American ones, should be considered a national security threat. It completely abandons WTO-based free trade agreements for telecommunications equipment and services. Protectionist policies based on national origin are applied not just to the application layer, but across the board: to telecom equipment providers, cloud services, app stores, hosting, undersea cables. China’s Cybersecurity law looks liberal in comparison.

Trump Administration Considers Global TikTok App Store Ban


  • A new document outlining the potential scope of President Trump’s TikTok ban suggests Apple could be forced to remove the short-form video sharing platform from its App Store in China.
  • Trump last week signed an executive order that would officially ban any U.S. transactions with TikTok if its Chinese parent ByteDance does not reach a deal to divest it to a U.S. company in 45 days.

What is WeChat and why is Trump targeting it?

Technology | The Guardian

  • On Friday Donald Trump issued twin executive orders that would ban any US transactions with the Chinese companies that own TikTok and WeChat, saying the US must take “aggressive action” in the interest of national security.
  • TikTok, a video-sharing app, has come under fire from US lawmakers and the Trump administration over national security concerns.

Tech, Financial Firms Eye Ways to Save TikTok’s U.S. Operations From Ban

The Wall Street Journal

Several investment and technology firms are exploring a potential deal for the U.S. operations of TikTok, which is facing a Trump administration ban, but they each would have to surmount hurdles at least as high as the Chinese social-media platform’s main suitor, Microsoft Corp.

TikTok vows to fight White House ban with ‘all remedies available’


TikTok has issued a statement on the White House’s plan to ban its popular app, saying it was “shocked” by the executive order and that it will respond in court, if necessary. The order, issued yesterday by President Trump, means that TikTok could di…

Can Trump ban TikTok? What the executive order means – explained

Technology | The Guardian

“It would be impossible to actively delete TikTok from every device in the United States,” he said. “It would be up to Google, Apple and Microsoft, as the purveyors of the operating systems, to enforce a ban and ensure users delete TikTok.”

  • On Thursday, Donald Trump issued two executive orders aimed at banning TikTok and WeChat, saying the US must take “aggressive action” against the China-based social media platforms in the interest of national security.
  • Trump’s executive order stated that apps from China “threaten the national security, foreign policy, and economy of the United States” and that after 45 days the US will prohibit “any transaction by any person” with ByteDance Ltd, the parent company of TikTok .

Microsoft’s TikTok deal: bargain of the decade or a $50bn blunder?

Technology | The Guardian

  • The surprise forced sale opportunity has pro-Microsoft analysts in rapture at the possibility of a bargain price for a social media business still in the foothills of potential growth.
  • As the clock ticks on Microsoft’s fast-track talks to buy TikTok the jury is out on whether it marks a unique opportunity to become a global social media giant overnight, or a $50bn (£38bn) geopolitically fuelled business blunder.

Why Microsoft Needs to Walk Away from TikTok

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

  • Each week, our writers Steve LeVine and Rob Walker make sense of the most important developments in business right now — and give them a Buy for positive trends or clever moves, a Sell for mistakes or missed opportunities, or a Hold if they’re noteworthy but too early to call.
  • Welcome to Buy/Sell/Hold , Marker ’s weekly newsletter that’s 100% business intelligence and 0% investment advice.

Is TikTok More of a Parenting Problem Than a Security Threat?

The New York Times

  • When Mr. Trump issued an executive order on Thursday that would effectively ban TikTok from operating in the United States in 45 days — part of an effort to force a sale of the app to an American company, most likely Microsoft — he declared it threatened “the national security, foreign policy and economy of the United States.”
  • But the threat TikTok poses, intelligence officials say, pales to the one created by Huawei, the Chinese telecommunications giant that was seeking to wire up the United States, Europe and much of the developing world, using the transition to 5G networks to control global communications.

Sensitive to claims of bias, Facebook relaxed misinformation rules for conservative pages

NBC News

  • According to internal discussions from the last six months, Facebook has relaxed its rules so that conservative pages, including those run by Breitbart, former Fox News personalities Diamond and Silk, the nonprofit media outlet PragerU and the pundit Charlie Kirk, were not penalized for violations of the company’s misinformation policies.
  • The list and descriptions of the escalations, leaked to NBC News, showed that Facebook employees in the misinformation escalations team, with direct oversight from company leadership, deleted strikes during the review process that were issued to some conservative partners for posting misinformation over the last six months.

Diversity & Inclusion in Capital Formation

The National Law Review

On August 4, 2020, the Securities and Exchange Commission (SEC) Small Business Capital Formation Advisory Committee (Committee) held a public meeting (Meeting) by video conference. The Meeting was prompted by the Committee’s recognition that businesses need capital to grow and survive, yet many underrepresented founders, including minorities and women, struggle to access investor capital, which impacts opportunities to grow their businesses. During the Meeting, the Committee heard from five underrepresented founders and investors of small businesses on their experiences and perspectives on capital raising and subsequently discussed ways to enable a more inclusive capital formation ecosystem. In the first in a series of alerts that will discuss diversity and inclusion issues in the investment management space, we take a close look at the Committee’s discussion and proposed recommendations for the SEC.

What Happens When AI is Used to Set Grades?

Harvard Business Review

  • In 2020, with high school exams canceled in many countries, the International Baccalaureate Organization (IBO) deployed an AI to determine final grades based on current and historical data.
  • This year Covid-19 locked down millions of high school seniors and governments around the world canceled year-end graduation exams, forcing examining boards everywhere to consider other ways of setting the final grades that would largely determine the future of the class of 2020.

Apple is reportedly planning a Peloton-like fitness subscription


Earlier, we learned that Apple may be preparing “Apple One” subscription bundles that combine its existing services like Apple TV and Apple Music. However, it might also enter an all-new arena.


‘There’s a huge level of innovation happening with Rolling Funds’: Gumroad CEO on Launching His First $1M+ per quarter Rolling Fund on AngelList

Angel List Blog

  • “I think there’s a huge level of innovation happening with Rolling Funds and venture capital in general,” Lavingia said.
  • Gumroad founder and CEO Sahil Lavingia launched his first managed fund, something he said was undreamable even two months ago.

Will Rolling Funds Roll Over the Venture Capital Industry? Long-Form

Minal Hasan

Rule 506(b)

Let’s start with how rolling funds legally work. For context, most venture capital firms fall under Rule 506(b) of Regulation D under Section 4(a)(2) of the Securities Act of 1933. Regulation D is a set of rules that offers exemptions from the registration requirements of the Securities Act. Put simply, being a registered entity with the SEC is a pain from both a financial and human capital standpoint. Regulation D allows VC firms to avoid becoming registered entities if they meet certain criteria. Most VC funds up until this point used Rule 506(b). Under Rule 506(b), an issuer may offer and sell an unlimited amount of securities so long as the issuer does not engage in general solicitation or general advertising, only accredited investors are investors.

Understanding Portfolio Construction


One thing that emerging managers are often tasked with is building a fund model. LPs often ask for a fund model because it forces a manager to think through portfolio construction including fund size, number of investments, ownership percentages, reserve ratios, management fees, recycling, etc.

I’ve probably looked at 100+ models in the past few years and the level of sophistication varies as you might imagine. There is no magic to building a model and LPs are not assessing your mastery of Excel. However, LPs do want to make sure you have a firm understanding of how the inputs and variables impact your ability to produce venture-like returns. Portfolio construction is one of the key inputs in answering the most important question for LPs:

Can Spacs shake off their bad reputation?

Financial Times

  • From hedge fund billionaire Bill Ackman to sports executive Billy Beane of Moneyball fame, some of the most high-profile investors have sought to raise cash in blank cheque companies, believing they have the special eye to find under-appreciated businesses which they can bring to the public markets.
  • The boom in Spacs is taking place at a time when trillions of dollars sitting in private equity and venture capital funds and many promising companies feel less pressure to go through the costly and time-consuming process of listing on the stock market in order to raise new money.

Subscription Agreements

Union Square Ventures

I just finished completing a thirty page form for an investment my wife and I are making in a limited partnership. This form is called a subscription agreement. I wrote about the frustration of having to complete this identical form again and again six and a half years ago here on AVC.

One great thing has happened on this issue in those six and a half years. Many/most subscription agreements are now sent digitally via Docusign or Adobe. That’s great. It is certainly a bit easier to complete them online and once you have done that, there is no need to scan and email.

But I remain confounded by the fact that we complete the exact same form time and time again, answering the exact same questions.

Family office investment and allocation to venture capital on the rise, according to SVB and Campden Wealth report

PR Newswire: press release distribution, targeting, monitoring and marketing

  • , Aug. 11, 2020 /PRNewswire/ — SVB Financial Group (NASDAQ: SIVB ), the parent company of Silicon Valley Bank, today released the “Family Offices Investing in Venture Capital – Global Trends & Insights Report” in partnership with Campden Wealth Research.
  • They are increasingly more open and active in venture, particularly in early-stage companies through direct investments and funds,” said John China , President of SVB Capital.

Staggering to the Halfway Mark…

On the Flying Bridge

  • According to Pitchbook and the National Venture Capital Association , the number of deals declined by 23.2% to 2,197 with $34.3 billion invested, which is still a robust pace, in large measure due to the prevalence of “mega” financings.
  • Globally, $112 billion was invested in 6,379 deals, which while a modest 2% decline in invested capital, it is a 20% reduction in the number of companies.

The most-funded VC companies in July 2020 – PitchBook News & Analysis

PitchBook News & Analysis

  • The company raised $291 million of venture funding in the form of convertible notes in a deal led by Farallon Capital Management and The Baupost Group on July 30, 2020.
  • The company raised $300 million of Series C venture funding in a deal led by Temasek Holdings and Canada Pension Plan Investment Board on July 8, 2020.

Primer – Management Fees in Venture Capital Funds

JD Supra

  • With that in mind, at a high level, there are three things to consider generally when structuring management fees: first, what is the amount of those fees; second, when in time do those fees start and end; and third, will the amount of fees reduce (i.e., “step down”) at some point in time reflective of perhaps a lesser level of work later in a fund’s lifecycle.
  • We see a number of venture capital funds with whom we work collecting fee to final liquidation on this basis, more in number than was the case some years ago.


Jack Dorsey’s review of Twitter

New York Times

Pitch Deck that raised $145m – Elad Gil

The Cadence: How to Turn Your SaaS Startup into an Army with David Sacks (Video + Transcript)


  • So, the company starts getting divided up into functional areas, or silos, product management, sales, customers support, marketing and so on, and this siloing of the org chart I think means that not everyone knows what everyone else is doing, and there’s a general feeling of disorganization or chaos in most startups.
  • The second month, mid-quarter, you’re doing a lot of pipeline inspections, the sales leader is making sure their team is going to hit their goal, they’re making adjustments, giving advice in terms of how to actually close those deals.

Airbnb could file to go public this month

Fundings & Exits – TechCrunch

  • The company was widely tipped to be considering a direct listing before COVID-19 arrived, crashing the global travel market , and with it, Airbnb’s financial health.
  • The news that Airbnb’s IPO could be back on caps a tumultuous year for the home-sharing unicorn, which promised in 2019 to go public in 2020 .

Facebook Goes All-In On FinTech With Launch of New Subsidiary


  • The division appears to be incorporating Facebook’s previous adventures in fintech under a single umbrella, with Marcus reportedly being in charge of both Novi, the wallet for Libra previously known as Calibra, as well as recent attempts to bring payments to the WhatsApp messenger.
  • Facebook has launched a new product group to promote “payments and commerce opportunities” with David Marcus, Libra’s co-creator, in charge of the division.

Facebook boss Mark Zuckerberg joins centibillionaire club

Technology | The Guardian

  • Zuckerberg owns a 13% stake in Facebook and his net worth passed $100bn as shares in the social network surged by 6% on investor optimism over the prospects of the TikTok rival.
  • Facebook announced the US rollout of Instagram Reels, its answer to the Chinese app TikTok, as the US president, Donald Trump, issued bans on American companies transacting with its parent company, ByteDance, and Tencent , which owns the WeChat messaging service.

The Secret to Productive Group Meetings over Video

Tomasz Tunguz

  • If you’ve been a group meeting for brainstorming, you’ll identify with the three problems reasearchers identified with in-person brainstorms:
  • Imagine we’re working together, and it’s time to brainstorm ideas for the new product we’re going to launch.

Podcasts of the Week

Why I Passed (Siegler, Isford, Vrionis, Rust) from The Full Ratchet:


Introducing the Venture Unlocked podcast

Stories by samir kaji on Medium

  • Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued growth with the emerging manager landscape Up until near the Global Financial Crisis (GFC), the venture capital asset class was more or less monolithic, with firms sharing similar attributes on partnership composition, stage and sector focus, and fund sizes.
  • Although I’ve written about many of my observations through blog posts (gleaned from both my own observations and the collective views of the individuals we speak to), I am in process of launching the Venture Unlocked Podcast to bring forth the candid insights of the best and brightest people in the venture industry in an effort to serve as the ongoing playbook for current and aspiring venture capitalists.

20VC: Loom Founder Joe Thomas on Whether To Take Multi-Stage Money at Seed, How Early Stage Founders Should Select Their VC, How Sequoia Won The Loom Deal & The 3 Rules To Operate Remote Teams Successfully

The Twenty Minute VC: Venture Capital | Startup Funding | The Pitch

1.) How Joe made his way from the mid-West to the valley and came to found one of the hottest startups today in Loom?

2.) What does Joe believe are 3 rules to operate remote teams successfully? Why does Joe believe in remote + HQ as a model so much? How do the tools and culture need to change with this as a new format for work? How do leaders now need to learn to write more than ever before?

3.) How has fundraising fundamentally change in the world of COVID? What are the benefits? What can founders do and tools can they use to increase their chances of getting funded in a COVID world? What did Coatue do to build rapport and trust without meeting in person?

4.) What advice would Joe give to founders on how to pick their early VCs? How does Joe advise founders when it comes to accepting multi-stage money at seed? Why does Joe believe you need to be upfront with your VCs about their ability to build future ownership?

5.) Sequoia and Coatue led the Series B, how did the round go down many months before Joe and Loom planned to raise it? What did Sequoia do to win and close the deal? How did that as a founder make Joe feel? How does Joe advise VCs on what it takes to win the most competitive of deals?

Tweet of the Week

Paul Graham linked to Jonathan Rauch from Persuasion Comminity

Those are my six warning signs. If you spot one or two, you should fear that a canceling may be happening; if you see five or six, you can be sure.

  • Punitiveness
  • Deplatforming
  • Organization
  • Secondary Boycotts
  • Moral grandstanding
  • Truthiness

Cancel culture now poses a real threat to intellectual freedom in the United States. According to a recent poll by the Cato Institute, a third of Americans say that they are personally worried about losing their jobs or missing out on career opportunities if they express their real political opinions. Americans in all walks of life have been publicly shamed, pressured into ritualistic apologies or summarily fired.

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