The Thanksgiving Issue

The Thanksgiving Issue

Announcing SignalRank Corporation

By Keith Teare • Issue #285 • View online

This week my new FinTech startup, SignalRank Corp, closed a $5m funding round. The company is focused on changing the rules of seed investing in favor of seed-stage companies and their seed investor. As more and more Decacorns are born, how do the early risk-takers secure their legacy?

Contents

Editorial

This is Thanksgiving. And I have a lot to be thankful for. My family, my This is Thanksgiving. And I have a lot to be thankful for. My family, my health. And, not least, the 4000 or so people who subscribe to That Was The Week on Revue. And also the 5000 plus who subscribe to the Linkedin version of That Was The Week and the 20,000 who follow it on Medium. Happy Thanksgiving to all of you, and thank you. Having almost 30,000 weekly readers is a wonderful antidote to my tendency to procrastinate. Every Thursday I collect my thoughts and get to write for a really smart group of people and that makes me want to do a good job.

This week I have something else to be thankful for. In last week’s video, I dropped that SignalRank Corporation has successfully closed a round of financing. The company raised $5m plus in seed financing with a wonderful group of investors.

With investors associated with Softbank, Tiger Global, KKR, Blackrock, Dodge & Cox, Benchmark Europe (Balderton), and others we feel that the next phase for the company is set on solid foundations.

The founding team has been working together for over 12 months and represents many of the areas we will need to excel at.

SignalRank is a FinTech company in the venture space. Its vision is to help seed investors and startups build deeper, longer, relationships as the number of unicorns and decacorns explodes. As funding rounds happen faster, and at accelerated valuation increments, seed investors face new challenges in the context of expanded opportunities.

SignalRank’s CTO and head of data science, Shawn Purcell, is credited with involvement in Netflix’s algorithm development, in Amazon’s A9 search engine, and most recently as part of Twitter’s data analytics efforts. He is leading the development of two algorithms used at SignalRank to aid in the formation of partnerships. These are called GPRank ™ and CompanyRank™.

Kayvan Baroumand was founding COO at Plug and Play and CEO at Nest GSV. His relationships with Angels, Seed fund managers, and VCs are second to none. These are our future partners.

Rob Hodgkinson, a fellow Brit here in the Bay Area, with backgrounds at Rothschild Ventures and Beringea has experience in allocating capital to early-stage opportunities in partnership with investors in those companies.

Matt Melkonian has over 2 decades of capital management and allocation. He is COO at SignalRank. And Jonathan Gottehrer has a two-decades-long set of experiences in raising capital for major projects.

I am thankful for their participation.

So what is SignalRank? Our Crunchbase profile says

SignalRank Corporation is a FinTech company in the Venture space. It focuses on the seed stage asset class and uses data analytics to allocate capital to the best seed fund managers for their top performing companies. GPRank and CompanyRank are two proprietary algorithms it leverages to automate capital allocation. The company invests from balance sheet. Its customers are seed stage investors with outstanding companies in their portfolio.”

There is a lot more that could be said but that is for later. In short, our plan is to raise up to $1 billion through several phases and invest it as an allocator using automated algorithms that are transparent to our partners.

We will work through partnerships. We will not be making direct investments into companies, but always through those partnerships. We are an operating company, not a fund.

We plan to list Signalrank within a reasonable time frame. At that time, ordinary investors will be able to own our shares as a way of owning stakes in high-growth private companies far earlier than would normally be the case, but without much of the risk normally associated with owning stock in private companies. Alex Wilhelm at Techcrunch talks about Sequoia’s changes in the context of “permanent capital” this week. SignalRank at maturity will be a special kind of permanent capital for the seed stage ecosystem.

Our initial product will be rolled out during the first part of 2022 and will then be visible on our website. If this editorial is not clear on what that’ll be, that is by design. We can talk more about it once it is in place. But, if you are a seed investor, start talking to us now. We can be reached at info@signalrank.co, linked on our website.

This week’s news is almost exclusively about developments in venture capital. Crunchbase’s Gené Teare (yes my wife) writes two fabulous pieces about the rise of Decacorns.

The trend is clear

And the number of investors benefitting is long

Read Gené’s writing to drill down. But the short story is that the best companies are raising more capital at higher valuations in shorter timeframes than ever before. This is driven by the ubiquity of cloud and mobile computing. Almost any human being can be a customer of a startup. And so growth happens on a scale previously unseen. Company valuations are the consequences of that.

It’s a great time to be a seed investor. It is also a great time to build a startup. The rise of growth investing accelerates those trends and creates new challenges and opportunities. SignalRank is trying to be part of solving the challenges and realizing the opportunities.

So once again, happy thanksgiving to you all, and to my new colleagues and investors.

Video


The Rise of the Decacorn

The Year Of The Decacorn: 2021 Shatters Records For Number Of New Startups Valued At $10B+

More new startups valued at $10 billion or above have been minted in 2021 — far more than in any prior year, and double the number created in 2020, which set the previous record for new “decacorns,” as these highly valued companies are known. All told, 30 companies have been newly valued at a decacorn valuation in 2021 so far, Crunchbase data shows.

news.crunchbase.com • Share

These Are The Most Active Investors In Decacorn Startups

Since the first decacorn was born in 2007 — when Facebook, now Meta, was valued at $15 billion in a funding round as a private company — there have been 84 of these companies in total, per Crunchbase data. Leading venture firms listed here mostly average between two to just under three rounds in the decacorns they invest in, per Crunchbase data.

news.crunchbase.com • Share


Adventure Capitalism

Adventure capitalism | The Economist

In the past five decades, the venture-capital ( VC ) industry has funded enterprising ideas that have gone on to transform global business and the world economy. But in the long run it also promises to make the industry more global, to funnel risk capital into a wider range of industries, and to make VC more accessible to ordinary investors.

www.economist.com • Share

As Sequoia changes its model, other permanent-capital VCs weigh in

The decision by Sequoia to become a registered investment adviser (RIA) and move to a “singular, permanent structure,” in its own words, landed with a splash in the U.S. venture capital market. But perhaps it shouldn’t have made quite as many waves as it did.

Sequoia was not the first United States-based venture capitalist to opt for RIA status, and it was also not the first venture capitalist that The Exchange tracks that moved to a more permanent-capital model. The combination of becoming an RIA and moving to a capital pool that isn’t beset with artificial return windows may be notable in the United States, but we’ve seen examples of this elsewhere.

To better understand what Sequoia is up to, The Exchange reached out to a number of publicly listed venture capital groups from the United Kingdom: We chatted with Augmentum Fintech COO Richard Matthews, Molten Ventures partner Vinoth Jayakumar and Forward Partners Managing Partner Nic Brisbourne. We’ve spoken to them before, when we previously explored the advantages and costs of VCs moving to listed status.

techcrunch.com • Share

The solo GP’s rise in Europe: Why venture capitalists go solo — Sifted

VCs tend to hunt in packs. But occasionally, investors splinter away to raise funds on their own — becoming so-called lone wolf VCs.

Solo VCs in the US have gained prominence in recent years for their agility and speed, and — unlike super angels — for taking part in late-stage rounds.

Now, the “one-person VC party” is gaining traction in Europe, fuelled by a competitive funding environment.

Earlier this year, British podcaster-turned-investor Harry Stebbings raised $140m for his fund 20VC, creating the biggest solo general partner (GP) account in Europe. Other solo capitalists in Europe include Rodrigo Martinez (ex-Point Nine) at HelloWorld and Nico Wittenborn (also ex-Point Nine) at Adjacent.

The latest to join break ranks and start a solo fund is former Lakestar partner Manu Gupta, who recently founded Blue Lion Capital, he confirmed to Sifted.

While Gupta has a partner who will manage the operations side of the portfolio, Gupta will be the primary investment and fundraising brain.

Blue Lion will be a micro tech fund focused on Europe and the US, Gupta confirmed. He declined the share the amount raised but said prospective, high-profile investors were finalising their due diligence.

sifted.eu • Share

More Institutional Investors Embrace Crypto VCs as Pantera Capital Raises $600 Million

Pension funds, sovereign wealth funds, endowments and other institutional sources of capital used to shy away from cryptocurrencies over concerns about their use in illicit activity. Those reservations increasingly seem to be dissipating.

The latest example comes from Pantera Capital, one of the first investment firms to focus exclusively on blockchain and cryptocurrencies. The firm, led by Tiger Management alum Dan Morehead, has raised $600 million for its fourth venture fund, according to a person with direct knowledge of the matter. Roughly 75% of the capital for the new fund is from institutional sources such as endowments, this person said. That’s a change from the firm’s $175 million vehicle raised in 2018, which was funded mainly by individuals, including newly wealthy crypto investors.

www.theinformation.com • Share

Tiger Global: How to Win

Tiger Global’s leader, Chase Coleman, began professional life at a fund that prioritized flexible thinking and a meritocratic structure. One Tiger employee said of Robertson, “He can look at a long list of numbers in a financial statement he’d never seen before and say, `This one is wrong.‘ And he’d be right.” Such acuity originates from natural talent but only flourishes with sufficient experience.

www.readthegeneralist.com • Share

VC Firm Hambro Perks Eyes First London SPAC Listing Under New Rules — Bloomberg

U.K. venture capital firm Hambro Perks Ltd. aims to raise 140 million pounds ($187 million) listing a special purpose acquisition company in London, in what could be the market’s first major blank-check offering since overhauling its rules.

Hambro Perks Acquisition Co. plans to sell 14 million units at 10 pounds apiece, it said in a statement Tuesday. Each unit represents one share and the right to receive half a warrant. It will seek to merge with a late-stage technology-enabled company, with a focus on firms from the U.K. and Europe, according to the statement.

www.bloomberg.com • Share


For Founders

10 Questions to Ask Before You Believe in a Business Model

A fascinating place in which this is playing out today is how food delivery companies, such as DoorDash and UberEats, are creating relationships with customers that are ongoing, on the backs of the restaurants desperate enough for business to yield control of their customers to the digital giants. Some of the most powerful business models in use today depend on the fact that it is inconvenient, expensive or time-consuming for customers to switch to another provider.

marker.medium.com • Share

When it comes to fundraising, you’re more important than you think

Our Head of Talent Alex Lewis shares insights, with collaboration with Felix Martinez and Kate McGinn from our team, on what Seedcamp’s high-level due-diligence process is for vetting and assessing founding teams. In this blog post, he lays out five traits we look out for when speaking with founders. “ In real estate, the three […]

The post When it comes to fundraising, you’re more important than you think first appeared on Seedcamp.

seedcamp.com • Share

A closer look at the 6 things to pre-empt 90% of Due Diligence

In my post I suggested that you should prepare a key metrics spreadsheet, a chart with your MRR movements, a cohort analysis, a financial plan, an analysis of your customer acquisition channels and, if you’re selling to bigger customers, information about your sales pipeline and details about your largest customers. How does your account and MRR retention look like for some of your older customer cohorts?

christophjanz.blogspot.com • Share


Startup of the Week

2021 PitchBook university rankings: Top 50 colleges for founders — Hint it’s California First

Which colleges produce the most successful entrepreneurs? See the top undergraduate and MBA programs for founders ranked by PitchBook.

pitchbook.com • Share


Tweet of the Week


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