The Corporate Venture Capital-as-a-Service Influencer

Venture Capital Is Losing Sight Of Its Most Important Investments: Seed-Stage Entrepreneurs @Forbes

Broad changes in the dynamics of the venture capital are leaving early-stage tech entrepreneurs high and dry when it comes to mentorship and true assistance. With the rise of mega-funds and a massive influx of capital into the tech sector over the past decade, the vast majority of vanguard firms in the VC industry are shifting their focus downstream in pursuit of later-stage, larger dollar investments.

According to the latest research from Crunchbase, late-stage companies are seeing the most VC action today. In Q2 2018, 64 percent of all VC dollars went to late-stage deals, setting new post-Dot Com records for the size and number of venture deals. Meanwhile, the percentage of total VC dollars invested in early-stage deals fell to the lowest levels the industry has seen in five years.

It’s a far cry from the original mission of venture capital – and an ironic one at that. While there’s a huge supply of capital to deploy, it is largely designated for companies that prove their business model and demonstrate traction.

 

 

As depicted in the graphic below, the very nature of Series A financing is changing. Venture capitalists used to lead Series A funding (so named to signify a startup’s first institutional financing round) before a company demonstrates traction. The purpose of the financing was to give the startup enough runway to overcome critical early-stage obstacles, such as hiring an initial team, delivering a working version of the product, and landing paying customers. But in today’s environment, mega-fund investors now expect to see these milestones already achieved before they lead a Series A.

 

#Alternative #Funding - Clearbanc raises $70M to give startups ad money for a rev share

Clearbanc offers a fundraising alternative. For fast-growing businesses reliably earning sales from their marketing spend, Clearbanc offers funding from $5,000 to $10 million in exchange for a steady revenue share of their earnings until it’s paid back plus a 6 percent fee. Clearbanc picks what merchants qualify by developing tech that scans their Stripe, Facebook ads, and other accounts to assess financial health and momentum. It’s already doled out $100 million this year.

“As a business successfully scales, we continue to provide them ongoing capital” co-founder and CEO Andrew D’Souza tells me. “Our goal is the be the first and last backer of a successful business and save the entrepreneur from having to take hundreds of pitch meetings to keep their company funded.”

After largely flying under the radar since being found in 2015, now Clearbanc has some big funding news of its own. It’s now raised $70 million from a seed and new Series A round from Emergence Capital, Social Capital, CoVenture, Founders Fund, 8VC, and more with Emergence’s Santi Subotovsky joining the board.

“Venture capital has shifted. Instead of funding true research and development, today 40% of venture capital goes directly to buying Google and Facebook ads” D’Souza claims (that may be true for some ecommerce startups but TechCrunch could not verify that stat for all startups). “Equity is the most expensive way to fund digital ad spend and repeatable growth. So we created something new.”

Clearbanc emerged from an angel investing alliance between two serial entrepreneurs. D’Souza had built Andreessen Horowitz-funded social recruiting site Top Prospect, USV-backed education tech company Top Hat, and Mastercard portfolio biometric authentication wearable startup Nymi. He’d helped raise over $300 million in venture after a stint at McKinsey when he begun co-investing with Michele Romanow, a VC from Canada’s version of the TV show Shark Tank called Dragons’ Den. She’d bootstrapped shopping hub Buytopia that acquired 10 other ecommerce companies, and discount-finder SnapSaves that she sold to Groupon in 2014.

“We started investing together in some of the deals we would see from Dragons’ Den and often found that an equity investment wasn’t the right structure for these consumer product companies. They had great economics and had found a niche of customers, but often didn’t want to exit the business at any point” D’Souza recalls. “They needed money to acquire more customers, scale up their marketing efforts and online ad spend. So we started to do these revenue share deals.”

Bezos family launches $2 billion philanthropy fund

Danny Moloshok / Reuters

Jeff Bezos, the Amazon founder who happens to be the richest person on the planet, has launched a philanthropic effort with an initial commitment of $2 billion. He and his wife MacKenzie will use the Day One Fund to build a "network of new, non-profit, tier-one preschools in low-income communities" and fund "existing non-profits that help homeless families."

via www.engadget.com

7 Things You Should Consider Before Investing In A Proptech Startup

Startup Concept with Jumping Happy Characters. Vector illustration

There are seven things you should consider before investing in a proptech (or any tech!) early stage startup.

The Product

Is the startup offering a solution to a real problem, or is it a problem looking for a solution? Do they have the market research to back their claims? Does the product provide an exponentially better solution to the alternatives out there? If the answer is no – and the golden rule is that the improvement should be 10x - you can get away with 2x or 3x but the product will be a very hard sell and the company will have to spend inefficient sums of money to convince customers to switch.

Of course, there are startups that will be creating a completely NEW market, but even for these kinds of products, you will have to consider market opportunity from the get-go.

Finally – and this is something that most startups will NOT have - does the product have a potential for virality?

via www.forbes.com

What Do VCs Look For In Proptech Startups?

Competing for fundsGetty

A couple of weeks ago, I published an article titled "7 Things You Should Consider Before Investing In A Proptech Startup". The piece was aimed at pre-seed and seed stage angel investors, and largely drew on my own personal experience as an investor and startup founder, as well as some empirical research I did with other angel investors. I expected it to resonate most with investors or would-be investors, and was very surprised to be contacted by several startup founders who told me they found my article very useful. Having given it some thought, it's actually not strange at all! After all, startups like to know what makes the people in charge of the purse strings tick. This led me to wonder, what do VCs look for in proptech startups?

The proptech VC world is still a relatively small space, despite significant growth over the past few years. Giants such as SoftBank, Andreessen Horowitz and Sequoia have started to take notice and made huge investments; such as SoftBank's recent rounds with Opendoor and Compass through its Vision Fund. Several proptech only funds have also emerged in recent years. Notable players are Metaprop in N

via www.forbes.com

The Building Blocks Of Corporate Innovation

Corporate innovation remains one of the hottest topics in Fortune 500 board rooms. According to a PwC survey, 97% of CEOs say that innovation is a top priority, but 94% are dissatisfied with their current innovation programs (source: McKinsey). For a large number of executives, the topic can be opaque and intimidating. Many wonder what innovation activities to prioritize, and who should be responsible.

As in any complex situation, breaking the problem into parts can help. In the case of corporate innovation, consider four alternative building blocks: a. build, b. partner, c. invest, or d. buy — corresponding to four corporate functions: a. research & development, b. business development, c. corporate venture capital, and d. mergers & acquisitions. There are also derivative innovation options, including corporate incubators, accelerators, licensing, and joint venture structures. These options encompass internal and external innovation.

Innovation risk is a function of operational and financial commitmentScott Lenet

via www.forbes.com

The top 10 cities for $100M VC rounds in 2018 so far | TechCrunch

That question got us wondering how these locales rank against other major metropolitan areas throughout the world. In the chart below, we’ve plotted the count of supergiant venture rounds¹ topping out at $100 million or more through November 5. These numbers are based off of reported data in Crunchbase, exclude private equity rounds and do not account for deals that may have already been closed but haven’t been publicly announced yet.

via techcrunch.com