Raising your first round of funding can be a daunting endeavor. While you’re delivering your business plan, wouldn’t it be great to able to read the minds of angel investors and VCs? Well, that may not be possible, but I can give you a few ideas of what most investors will be pondering while listening to your pitch:
1. This entrepreneur knows the technology and market but hasn’t led a growth company before. Will a new CEO be necessary to grow this company to its fullest potential? And if that turns out to be the case, how will this entrepreneur react?
From the beginning, investors are thinking about life-after-entrepreneur. Early stage investors don’t put money in until they’ve thought through a path to get their equity back out. Usually that means scaling up operations and revenue until the company has enough customers and market share to be an interesting
In the first quarter of 2016, 35 unicorns raised a total of $12.6 billion from 36 funding events. While this is roughly the same amount that was raised in the first quarter of 2015, there were 58 investments in the previous period. This means that this year’s fundings were marked by larger deal sizes.
Looking at the evolution of company valuations, we saw a surprising 11 up-rounds, 4 unchanged valuations and only 4 down-rounds. The combined value progression is a staggeringly positive $26 billion, suggesting very good health – for the moment, anyway – for companies in the Unicorn Club.
11 new unicorns in the first quarter of 2016
The Unicorn Club keeps greeting new entrants, but at a slower pace. The first quarter of 2015 saw the emergence of 23 unicorns, and the second quarter witnessed the birth of 25 unicorns. Growth slowed in the back of half of 2015: 15 in the third quarter and 13 in the
More than 325,000 potential buyers have put down $1,000 apiece for a Tesla Model 3 electric car that they won’t get for two years, if not considerably longer than that.
Which must frustrate the electrification team at General Motors deeply.
The 2017 Chevrolet Bolt EV with more than 200 miles of range and a starting price of $37,500 is already in pre-production, and could go on sale late this year—fully a year before Tesla’s announced delivery date for the Model 3.
Two recent articles from Detroit news outlets convey different reactions to this disparity.
“If you are an executive at a venerable automaker whose company is working on the same technology,” writes reporter Richard Truett in industry trade journal Automotive News, “seeing crowds waiting in line to lay down a deposit for a Model 3 had to have been tough to watch.”
When going from $0-10 million in sales, most tech entrepreneurs think there’s only one path to raise growth capital for their startups: selling equity in their business. It’s a model that has been reinforced by several decades of tech companies feeding on a steady diet of equity money. This equity model creates a cycle for entrepreneurs: found, build, raise, grow, raise, grow, and then exit, hopefully at a top valuation (and without too much dilution or a down round, since that would wipe out your founder holdings).
Then after you exit, if you’re really successful, you either spend lots of time on your sailboat, dabble as an angel investor and startup guru, or you repeat the process by starting another company and going at it all over again.
But things have changed over the past decade, and entrepreneurs should adjust their mental framework about startup financing accordingly. Here are
Even with a healthy resetting of many tech company valuations underway, eleven firms attained unicorn status in Q1 and a combined worth of more than $21 billion, according to VB Profiles. The incoming unicorns are diverse, ranging from Anaplan,an enterprise business platform which may be eyeing an IPO, to Dada, a Chinese mobile application company that focuses on providing last mile logistics services, to Africa’s first unicorn, the Africa Internet Group, which runs Jumia, the continent’s largest ecommerce company.
Of note is the companies’ Funding To Valuation index, which is calculated by dividing their worth by the amount of funding prior to their unicorn valuation. (Disclosure: VB Profiles is a cooperative
Happy Friday! This week, Tech.eu tracked 11 technology M&A transactions and 76 funding deals (totalling €400 million) in Europe and Israel.
Like every week, we listed every single one of them in our free weekly newsletter, along with interesting news regarding fledgling European startups, tech investors old and new, a number of good reads published elsewhere, government and policy news, as well as an overview of interesting lists, facts and figures from a wide variety of sources.
You can subscribe to our newsletter below to receive all this information in your inbox every Friday afternoon for free, but here’s an overview of the 10 biggest European tech news items for this week:
1) Intercom, the Irish-founded customer communications platform, raised $50 million from Index Ventures. Also this week we published an interview with Intercom’s co-founder Des Traynor, where he talks about the company’s forthcoming tour of events as
Edge Retreats, a London-based tech startup specialising in luxury villas, has closed a $1m seed funding round led by VC fund Lean Investments.
The round, which also drew support from the startup’s current investor Forward Partners, brings Edge Retreats’ total amount of funding raised to $1.4m.
Speaking about the round’s closure, McCormick said: “After getting great support from Forward Partners over the past year, we’re excited to be partnering with Lean Investments to accelerate the growth of our company. This investment will allow us to continue to build a world-class product while increasing the number of properties and countries that we feature.
“We’re pleased to be simplifying the process of finding and booking luxury villas around the world while offering a exceptional concierge service. The story so far has been incredible, and I hope this next stage in our story will be even more exciting,” continued the CEO.
Berlin-based deepstreamHub, a platform for building real time apps, has closed a $1 million seed round from Blue Yard Capital to further develop its cloud platform for app developers.
This marks the first investment for Berlin’s Blue Yard Capital, a new VC fund launched in January that raised $120 million to invest in early stage startups.
Wolfram Hempel and Yasser Fadl, the founders of deepstreamHub which was launched a year, said the startup wants to be the platform of choice for developing real time apps in areas like social messaging, geolocation services, or the Internet of Things. Its real time backend as a service, based on the open source server deepstream.io, allows developers to integrate data with sites and services like Slack, GitHub, payment providers or IoT endpoints.
“This is not just about creating another real time data service, it’s about using the power of real time
With a 3800% ROI, email is your strongest channel — but you’ve got plenty of competition. Join top marketers as they discuss the personalization strategies that can dramatically increases open rates, CTR, and, mosts importantly, conversion.
With a broad range of clients from Ford and Google to Heifer International and NYU Tisch School of the Arts, Blue State Digital has unlocked some of the secrets of digital marketing.
“We’ve isolated the common thread that unites people when they care about anything, whether it’s a car brand or a legislative issue,” says Andrew Rothman, head of creative and digital.
A large portion of their ability to build brand loyalty and boost consumer engagement comes from the email marketing strategies they’ve been honing from the start. When it comes to developing an email campaign, Rothman advises, conversion must always be your key goal. In other words, throw
Visual bookmarking tool Pinterest is ramping up its ad business this week with the news that it’s finally expanding its Promoted Pins product internationally.
First announced back in early 2014, Promoted Pins does exactly what its name suggests by letting businesses pay to have their Pins (products) placed front-and-center in people’s feed — it can be targeted at specific demographics too depending on the desired audience.
While it has only been offered to U.S. businesses so far, the San Francisco-based company is now opening things up to other markets, starting with the U.K. Pinterest said that Promoted Pins will be opened to additional English-speaking countries later this year.
Founded in 2009, Pinterest has emerged as a major player in the social networking realm, nabbing more than $1 billion in funding on its way to claiming 100 million users. Pinterest followed a similar path to monetizing as other social
Kamarq Holdings is a startup to offer the high quality and connected furniture brand Kamarq. The company recently announced on Thursday that it has secured a total of about 350 million yen (about $3.2 million) from Energy & Environment Investment, Saison Ventures, iSGS Investment Works as well as angel investors. Saison Ventures is the investment arm of Japanese leading credit card company Credit Saison (TSE:8253). The funds will be used for product development, systems development or human resources.
Coinciding with this funding, the firm also announced the launch of its first product called Sound Table, and started accepting pre-orders on the Makuake crowdfunding site. The backers can receive the product before the day of general release, and can purchase it at 80% of the normal price. Sound Table is a wooden IoT (Internet of Things) table capable of playing music or environmental sounds in accordance with the weather,
In the midst of the Apple-FBI dispute over the San Bernardino shooter’s iPhone, countless tech companies took the rare step of publicizing views in “friends of the court” briefs, statements, and interviews. The sheer number, nearly 40, filing amicus briefs — Facebook, Google, Mozilla, and Microsoft, as well as my own company, AVG — is telling. Though we’ve read much about the positions and the parade of horribles that could happen, this dispute provides rare insight into what compels Silicon Valley to act and why it appears to respond slowly.
Public safety, free speech, and the ability to create secure products would all seem to justify immediate action. Instead, most tech companies remained silent for several days after the facts of the case became public. Apple CEO Tim Cook’s arguments stood alone. Allies eventually emerged … a week later. Mass objection arose only with the court deadline arriving. What
What does it take to monetize over 2 million daily active users in 196 countries? Join Grindr CTO Lukas Sliwka and VB analyst Jon Cifuentes in a free webinar to get an inside scoop on how mobile app analytics solutions help you powerfully leverage critical user data.
Grindr, the first and largest gay dating site in the world, has 5 to 6 million monthly active users and 2.4 million daily active users. At any given time, there are over a million users active on the platform, says Lukas Sliwka, the company’s CTO.
Those users are a rich and crucial source of data as Grindr continues to grow its popularity with current clients and expand its reach globally. “From a business perspective,” Sliwka says, “It’s critical for us to know what features are working — and why — and how the app is being used in
There’s a mythology to successful startup leaders, and part of it is that they can’t fail. We lionize successful entrepreneurs, and elevate those with multiple major successes to the status of minor deity: an Elon Musk, a Steve Jobs.
Above: Kate Upton in Game of War: Fire Age commercial.
Image Credit: Machine Zone
But before the rise, there’s reality. For Gabe Leydon, that was unemployment.
“I didn’t come from money,” he told me yesterday at VentureBeat’s Mobile Summit. “I started Machine Zone while I was on unemployment benefits.”
Machine Zone is, of course, one of the shining stars of the new mobile economy. The company perennially has two of the top five grossing games in the world: Game of War and Mobile Strike. Game of War alone could be grossing in excess of $1 billion annually, and VB founder Matt Marshall estimated the company’s annual advertising spend not too
This sponsored post is produced in association with Nvidia.
In startup land, financing is getting harder. Valuation inflation is dissipating, and investors are demanding profitability, and fast. The pool of resources required to build a successful tech company is also larger than ever as the technology industry matures and the demand for vertical integration booms.
“Even if you have great technology and people, even if you’re in a big market space, sometimes you still don’t make it,” says Jeff Herbst, vice president of business development at Nvidia. “Getting your voice heard, getting funded, getting the attention of and partnering with companies like Nvidia is not always easy.”
Nvidia decided to tackle that challenge in their arena by adding the Emerging Companies Summit, which features the Early Stage Challenge, to their annual GPU Technology Conference.
For new startups, conferences are an essential investment, offering opportunities to network, gain insight from peers,
When you don’t count Spotify, the landscape changes significantly:
That’s right. Excluding Spotify’s latest, pre-IPO financing round, startups in the old continent raised a combined €3.5 billion, almost exactly the same amount as in the previous quarter (€3.4 billion), despite there being 183 more funding
Whenever I hear or see the word “innovation,” a feeling of nausea washes over me. Unlike other cliché buzzwords (synergy, paradigm shift, value-add, etc.) that I have forced myself to accept, I’m afraid “innovation” is one I may never be able to stomach.
The word is the corporate equivalent of Valleyspeak linguistic fillers such as “like”, “totally”, or “bro.” It is devoid of meaning but used liberally by executives, journalists, and even politicians.
Before I get too far, it’s important to establish my bona fides. I’m not a luddite or a curmudgeon, or even a run-of-the-mill malcontent. I have actually spent most of my adult life innovating. As a university student, I was building websites when most people were still figuring out how to use fax machines. Long before Marc Andreessen invented the modern web browser, I coauthored an “Exploring the Internet” chapter of a McGraw-Hill college
If Elon Musk was delighted by the 115,000 orders for his Tesla Model 3 at launch, he should be positively jubilant with the latest figures which break the $10 billion mark.
Today, the Tesla Motors CEO tweeted that his company had received 276,000 orders for the Model 3 at the end of day on Saturday April 2, 2016. Earlier that day, the Musk reported orders reaching 253,000 orders in the first 36 hours, which when delivered, would mean more than $10 billion in revenue.
Demand for the Model 3 in its first 36 hours has been compared to people waiting in line for a new iPhone and seems to have caught everyone off guard. This all electric sports car is intended for the mainstream with a base price is $35,000 and 200 mile range. Describing the massive number of pre-orders, Musk expressed his gratitude and delight on Twitter: “Token of appreciation for those who lined up coming
When it comes to going public, sometimes discretion is the better part of valor.
The first quarter of 2016 saw no technology IPOs on U.S. markets, according to a report released last week by research firm Dealogic. The last time this was happened was seven years ago, in the months following the collapse of Lehman Brothers as the Great Recession was getting underway.
This time it’s different. During the first three months of the year, the U.S. stock markets were marked by overall volatility. The shares of many tech stocks – Facebook, Amazon, Google and others – took a sharp dive in early February before rebounding during the rest of the quarter.
In the face of this tumult, 22 tech companies filed to go public, but look to be stranded in registration waiting for markets to improve, or to at least stabilize, so they can raise needed capital. If conditions
There’s a new twist in America’s 20-plus-year outsourcing narrative. U.S. companies have historically looked to India for cost-effective programming talent, and more recently to Eastern Europe for mobile development. But these days, more and more IT jobs are being outsourced in a new direction: south.
A number of trends in Latin America have created a growing pool of IT talent. The continent’s 400 million-strong population has seen Internet usage grow by 1644.3 percent over the last 15 years, with an Internet penetration rate in 2015 of 61 percent (the global average is 45 percent). There’s also a growing number of startups (a.k.a. “TechnoLatinas”) in the region. Programs like Startup Chile have backed over 1,000 startups, while Colombian business development bank Bancoldex has raised $500 million to spur economic development through young companies.
U.S.-based technical marketplaces like Toptal, publicly traded Globant