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The Silicon Valley exodus continues

Posted by on Mar 5, 2019 in 500 startups, Accel, Accelerator, angelpad, founders fund, General Catalyst, Kleiner Perkins, Menlo Park, norwest venture partners, palo alto, San Francisco, shasta ventures, Silicon Valley, Startups, TC, True Ventures, Uber, Venture Capital, Y Combinator | 0 comments

For a long time, it was the norm for founders to haul their hardware to the 3000 block of Sand Hill Road, where the venture capitalists of “Silicon Valley” would be awaiting their pitches. Today, many of the investors that touted the exclusivity of “The Valley” have moved north to San Francisco, where they have better access to top entrepreneurs.

Y Combinator, a Silicon Valley institution and to many the lifeblood of the startups and venture capital ecosystem, is the latest to pack up shop. YC, which invests $150,000 for 7 percent equity in a few hundred startups per year, is currently searching for a space in SF to operate its accelerator program, sources close to YC confirm to TechCrunch, because the majority of YC’s employees and its portfolio founders reside in the city.

Founded in 2005, YC’s roots are in Mountain View, California. In its first four years, YC offered programs in Cambridge, Massachusetts and Mountain View before opting in 2009 to focus exclusively on The Valley. In late 2013, as more and more of its partners and portfolio companies were establishing themselves in SF, YC opened a satellite office in the city in what would be the beginning of its journey northbound.

The small satellite office, used to support SF-based staff and provide portfolio companies resources and workspace, is located in Union Square. The fate of YC’s Mountain View office is unclear.

YC’s move north will be the latest in a series of small changes that, together, point to a new era for the Sam Altman-run accelerator. Approaching its 15th birthday, YC announced in September it was changing up the way it invests. No longer would it seed startups with $120,000 for 7 percent equity, it would give startups an additional 30,000 to cover the expenses of getting a business off the ground and it would admit a whole lot more companies.

YC began mentoring its largest cohort of companies to date in late 2018. The astonishing 200-plus group in its winter 2019 batch is more than 50 percent larger than the 132-team cohort that graduated in spring 2018. To accommodate the truly gigantic group at YC Demo Days later this month (March 18 and 19), YC has moved to a new venue, SF’s Pier 48. Historically, YC Demo Days were hosted at the Computer History Museum near its home in Mountain View.

YC has also ditched “Investor Day,” which is typically an opportunity for investors to schedule meetings with startups that just completed the accelerator program. YC writes that the decision came “after analyzing its effectiveness.” On top of that, rumors suggest YC is planning to put an end to Demo Days. Other accelerators, AngelPad for example, put a stop to the tradition last year after realizing demo day was more of a stress to startup founders than a resource. Sources close to YC, however, tell TechCrunch these rumors are categorically false.

YC isn’t the first accelerator to ditch its Silicon Valley digs. 500 Startups, a smaller yet still prolific accelerator, opened an SF satellite office the same year as YC, and in 2018, the nine-year-old program made the decision to permanently relocate to SF. Venture capital firms, too, have realized the opportunities are larger in SF than on Sand Hill Road.

The transition from the peninsula to the city began around 2012, when VC heavyweights like Uber and Twitter-backer Benchmark opened an office in SF’s mid-market neighborhood. Months later, 47-year-old Kleiner Perkins, an investor in Stripe and DoorDash, opened the doors to its new workplace in SF’s South Park neighborhood.

Around that same time a whole bunch of firms followed suit: Shasta Ventures, Norwest Venture Partners, Accel, GV, General Catalyst and NEA opened SF shops, to name a few. Many of these firms, Benchmark, Kleiner and Accel, for example, held onto their Silicon Valley locations. Firms like True Ventures and Peter Thiel’s Founders Fund planted stakes in SF years prior. Both firms have operated SF offices since 2005; True Ventures, for its part, has managed a Palo Alto office from the get-go, as well.

“When we first started, it was [expected] that it would be maybe 60-40 Peninsula to the city; it’s actually turned out to be 80-20 SF to The Valley,” True Ventures co-founder Phil Black told TechCrunch. “For us, it was important to be near our customer: the founder. It’s important for us to be in and around where founders are doing their things.”

The transition out of The Valley is ongoing. Other VC funds are still in the process of opening their first SF offices as more partners beg for shorter commutes. Khosla Ventures, for example, is currently searching for an SF headquarters.

Silicon Valley real estate will likely remain a hot — or warm, at least — commodity, however. Why? Because long-time investors have lives established in that part of the bay, where they’ve built homes in well-kept, affluent cities like Woodside, Atherton and Los Altos.

Still, Y Combinator’s move highlights an increasingly adopted mantra: Silicon Valley isn’t the goldmine it used to be. For the best deals and greatest access to entrepreneurs, SF takes the cake — for now, that is. But with rising rents and a changing attitude toward geographically diverse founders, how long SF will remain the destination for top talent is an entirely different question.


Source: The Tech Crunch

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How students are founding, funding and joining startups

Posted by on Feb 6, 2019 in Accel, Accel Scholars, Alumni Ventures Group, Amanda Bradford, Artificial Intelligence, Bill Gates, boston, coinbase, Column, CRM, CrunchBase, distributed systems, Dorm Room Fund, Drew Houston, Dropbox, editor-in-chief, Energy, entrepreneurship, Facebook, Finance, FiscalNote, Forward, General Catalyst, Graduate Fund, greylock, harvard, Jeremy Liew, Kleiner Perkins, lightspeed, Mark Zuckerberg, MIT, Pear Ventures, peter boyce, Pinterest, Private Equity, Series A, stanford, Start-Up Chile, Startup company, Startups, TC, TechStars, True Ventures, Ubiquity6, uc-berkeley, United States, upenn, Venture Capital, venture capital Firms, Warby Parker, Y Combinator | 0 comments

There has never been a better time to start, join or fund a startup as a student. 

Young founders who want to start companies while still in school have an increasing number of resources to tap into that exist just for them. Students that want to learn how to build companies can apply to an increasing number of fast-track programs that allow them to gain valuable early stage operating experience. The energy around student entrepreneurship today is incredible. I’ve been immersed in this community as an investor and adviser for some time now, and to say the least, I’m continually blown away by what the next generation of innovators are dreaming up (from Analytical Space’s global data relay service for satellites to Brooklinen’s reinvention of the luxury bed).

Bill Gates in 1973

First, let’s look at student founders and why they’re important. Student entrepreneurs have long been an important foundation of the startup ecosystem. Many students wrestle with how best to learn while in school —some students learn best through lectures, while more entrepreneurial students like author Julian Docks find it best to leave the classroom altogether and build a business instead.

Indeed, some of our most iconic founders are Microsoft’s Bill Gates and Facebook’s Mark Zuckerberg, both student entrepreneurs who launched their startups at Harvard and then dropped out to build their companies into major tech giants. A sample of the current generation of marquee companies founded on college campuses include Snap at Stanford ($29B valuation at IPO), Warby Parker at Wharton (~$2B valuation), Rent The Runway at HBS (~$1B valuation), and Brex at Stanford (~$1B valuation).

Some of today’s most celebrated tech leaders built their first ventures while in school — even if some student startups fail, the critical first-time founder experience is an invaluable education in how to build great companies. Perhaps the best example of this that I could find is Drew Houston at Dropbox (~$9B valuation at IPO), who previously founded an edtech startup at MIT that, in his words, provided a: “great introduction to the wild world of starting companies.”

Student founders are everywhere, but the highest concentration of venture-backed student founders can be found at just 5 universities. Based on venture fund portfolio data from the last six years, Harvard, Stanford, MIT, UPenn, and UC Berkeley have produced the highest number of student-founded companies that went on to raise $1 million or more in seed capital. Some prospective students will even enroll in a university specifically for its reputation of churning out great entrepreneurs. This is not to say that great companies are not being built out of other universities, nor does it mean students can’t find resources outside a select number of schools. As you can see later in this essay, there are a number of new ways students all around the country can tap into the startup ecosystem. For further reading, PitchBook produces an excellent report each year that tracks where all entrepreneurs earned their undergraduate degrees.

Student founders have a number of new media resources to turn to. New email newsletters focused on student entrepreneurship like Justine and Olivia Moore’s Accelerated and Kyle Robertson’s StartU offer new channels for young founders to reach large audiences. Justine and Olivia, the minds behind Accelerated, have a lot of street cred— they launched Stanford’s on-campus incubator Cardinal Ventures before landing as investors at CRV.

StartU goes above and beyond to be a resource to founders they profile by helping to connect them with investors (they’re active at 12 universities), and run a podcast hosted by their Editor-in-Chief Johnny Hammond that is top notch. My bet is that traditional media will point a larger spotlight at student entrepreneurship going forward.

New pools of capital are also available that are specifically for student founders. There are four categories that I call special attention to:

  • University-affiliated accelerator programs
  • University-affiliated angel networks
  • Professional venture funds investing at specific universities
  • Professional venture funds investing through student scouts

While it is difficult to estimate exactly how much capital has been deployed by each, there is no denying that there has been an explosion in the number of programs that address the pre-seed phase. A sample of the programs available at the Top 5 universities listed above are in the graphic below — listing every resource at every university would be difficult as there are so many.

One alumni-centric fund to highlight is the Alumni Ventures Group, which pools LP capital from alumni at specific universities, then launches individual venture funds that invest in founders connected to those universities (e.g. students, alumni, professors, etc.). Through this model, they’ve deployed more than $200M per year! Another highlight has been student scout programs — which vary in the degree of autonomy and capital invested — but essentially empower students to identify and fund high-potential student-founded companies for their parent venture funds. On campuses with a large concentration of student founders, it is not uncommon to find student scouts from as many as 12 different venture funds actively sourcing deals (as is made clear from David Tao’s analysis at UC Berkeley).

Investment Team at Rough Draft Ventures

In my opinion, the two institutions that have the most expansive line of sight into the student entrepreneurship landscape are First Round’s Dorm Room Fund and General Catalyst’s Rough Draft VenturesSince 2012, these two funds have operated a nationwide network of student scouts that have invested $20K — $25K checks into companies founded by student entrepreneurs at 40+ universities. “Scout” is a loose term and doesn’t do it justice — the student investors at these two funds are almost entirely autonomous, have built their own platform services to support portfolio companies, and have launched programs to incubate companies built by female founders and founders of color. Another student-run fund worth noting that has reach beyond a single region is Contrary Capital, which raised $2.2M last year. They do a particularly great job of reaching founders at a diverse set of schools — their network of student scouts are active at 45 universities and have spoken with 3,000 founders per year since getting started. Contrary is also testing out what they describe as a “YC for university-based founders”. In their first cohort, 100% of their companies raised a pre-seed round after Contrary’s demo day. Another even more recently launched organization is The MBA Fund, which caters to founders from the business schools at Harvard, Wharton, and Stanford. While super exciting, these two funds only launched very recently and manage portfolios that are not large enough for analysis just yet.

Over the last few months, I’ve collected and cross-referenced publicly available data from both Dorm Room Fund and Rough Draft Ventures to assess the state of student entrepreneurship in the United States. Companies were pulled from each fund’s portfolio page, then checked against Crunchbase for amount raised, accelerator participation, and other metrics. If you’d like to sift through the data yourself, feel free to ping me — my email can be found at the end of this article. To be clear, this does not represent the full scope of investment activity at either fund — many companies in the portfolios of both funds remain confidential and unlisted for good reasons (e.g. startups working in stealth). In fact, the In addition, data for early stage companies is notoriously variable in quality, even with Crunchbase. You should read these insights as directional only, given the debatable confidence interval. Still, the data is still interesting and give good indicators for the health of student entrepreneurship today.

Dorm Room Fund and Rough Draft Ventures have invested in 230+ student-founded companies that have gone on to raise nearly $1 billion in follow on capital. These funds have invested in a diverse range of companies, from govtech (e.g. mark43, raised $77M+ and FiscalNote, raised $50M+) to space tech (e.g. Capella Space, raised ~$34M). Several portfolio companies have had successful exits, such as crypto startup Distributed Systems (acquired by Coinbase) and social networking startup tbh (acquired by Facebook). While it is too early to evaluate the success of these funds on a returns basis (both were launched just 6 years ago), we can get a sense of success by evaluating the rates by which portfolio companies raise additional capital. Taken together, 34% of DRF and RDV companies in our data set have raised $1 million or more in seed capital. For a rough comparison, CB Insights cites that 40% of YC companies and 48% of Techstars companies successfully raise follow on capital (defined as anything above $750K). Certainly within the ballpark!

Source: Crunchbase

Dorm Room Fund and Rough Draft Ventures companies in our data set have an 11–12% rate of survivorship to Series A. As a benchmark, a previous partner at Y Combinator shared that 20% of their accelerator companies raise Series A capital (YC declined to share the official figure, but it’s likely a stat that is increasing given their new Series A support programs. For further reading, check out YC’s reflection on what they’ve learned about helping their companies raise Series A funding). In any case, DRF and RDV’s numbers should be taken with a grain of salt, as the average age of their portfolio companies is very low and raising Series A rounds generally takes time. Ultimately, it is clear that DRF and RDV are active in the earlier (and riskier) phases of the startup journey.

Dorm Room Fund and Rough Draft Ventures send 18–25% of their portfolio companies to Y Combinator or Techstars. Given YC’s 1.5% acceptance rate as reported in Fortune, this is quite significant! Internally, these two funds offer founders an opportunity to participate in mock interviews with YC and Techstars alumni, as well as tap into their communities for peer support (e.g. advice on pitch decks and application content). As a result, Dorm Room Fund and Rough Draft Ventures regularly send cohorts of founders to these prestigious accelerator programs. Based on our data set, 17–20% of DRF and RDV companies that attend one of these accelerators end up raising Series A venture financing.

Source: Crunchbase

Dorm Room Fund and Rough Draft Ventures don’t invest in the same companies. When we take a deeper look at one specific ecosystem where these two funds have been equally active over the last several years — Boston — we actually see that the degree of investment overlap for companies that have raised $1M+ seed rounds sits at 26%. This suggests that these funds are either a) seeing different dealflow or b) have widely different investment decision-making.

Source: Crunchbase

Dorm Room Fund and Rough Draft Ventures should not just be measured by a returns-basis today, as it’s too early. I hypothesize that DRF and RDV are actually encouraging more entrepreneurial activity in the ecosystem (more students decide to start companies while in school) as well as improving long-term founder outcomes amongst students they touch (portfolio founders build bigger and more successful companies later in their careers). As more students start companies, there’s likely a positive feedback loop where there’s increasing peer pressure to start a company or lean on friends for founder support (e.g. feedback, advice, etc).Both of these subjects warrant additional study, but it’s likely too early to conduct these analyses today.

Dorm Room Fund and Rough Draft Ventures have impressive alumni that you will want to track. 1 in 4 alumni partners are founders, and 29% of these founder alumni have raised $1M+ seed rounds for their companies. These include Anjney Midha’s augmented reality startup Ubiquity6 (raised $37M+), Shubham Goel’s investor-focused CRM startup Affinity (raised $13M+), Bruno Faviero’s AI security software startup Synapse (raised $6M+), Amanda Bradford’s dating app The League (raised $2M+), and Dillon Chen’s blockchain startup Commonwealth Labs (raised $1.7M). It makes sense to me that alumni from these communities that decide to start companies have an advantage over their peers — they know what good companies look like and they can tap into powerful networks of young talent / experienced investors.

Beyond Dorm Room Fund and Rough Draft Ventures, some venture capital firms focus on incubation for student-founded startups. Credit should first be given to Lightspeed for producing the amazing Summer Fellows bootcamp experience for promising student founders — after all, Pinterest was built there! Jeremy Liew gives a good overview of the program through his sit-down interview with Afterbox’s Zack Banack. Based on a study they conducted last year, 40% of Lightspeed Summer Fellows alumni are currently active founders. Pear Ventures also has an impressive summer incubator program where 85% of its companies successfully complete a fundraise. Index Ventures is the latest to build an incubator program for student founders, and even accepts founders who want to work on an idea part-time while completing a summer internship.

Let’s now look at students who want to join a startup before founding one. Venture funds have historically looked to tap students for talent, and are expanding the engagement lifecycle. The longest running programs include Kleiner Perkins’<strong class=”m_1196721721246259147gmail-markup–strong m_1196721721246259147gmail-markup–p-strong”> KP Fellows and True Ventures’ TEC Fellows, which focus on placing the next generation’s most promising product managers, engineers, and designers into the portfolio companies of their parent venture funds.

There’s also the secretive Greylock X, a referral-based hand-picked group of the best student engineers in Silicon Valley (among their impressive alumni are founders like Yasyf Mohamedali and Joe Kahn, the folks behind First Round-backed Karuna Health). As these programs have matured, these firms have recognized the long-run value of engaging the alumni of their programs.

More and more alumni are “coming back” to the parent funds as entrepreneurs, like KP Fellow Dylan Field of Figma (and is also hosting a KP Fellow, closing a full circle loop!). Based on their latest data, 10% of KP Fellows alumni are founders — that’s a lot given the fact that their community has grown to 500! This helps explain why Kleiner Perkins has created a structured path to receive $100K in seed funding to companies founded by KP Fellow alumni. It looks like venture funds are beginning to invest in student programs as part of their larger platform strategy, which can have a real impact over the long term (for further reading, see this analysis of platform strategy outcomes by USV’s Bethany Crystal).

KP Fellows in San Francisco

Venture funds are doubling down on student talent engagement — in just the last 18 months, 4 funds have launched student programs. It’s encouraging to see new funds follow in the footsteps of First Round, General Catalyst, Kleiner Perkins, Greylock, and Lightspeed. In 2017, Accel launched their Accel Scholars program to engage top talent at UC Berkeley and Stanford. In 2018, we saw 8VC Fellows, NEA Next, and Floodgate Insiders all launch, targeting elite universities outside of Silicon Valley. Y Combinator implemented Early Decision, which allows student founders to apply one batch early to help with academic scheduling. Most recently, at the start of 2019, First Round launched the Graduate Fund (staffed by Dorm Room Fund alumni) to invest in founders who are recent graduates or young alumni.

Given more time, I’d love to study the rates by which student founders start another company following investments from student scout funds, as well as whether or not they’re more successful in those ventures. In any case, this is an escalation in the number of venture funds that have started to get serious about engaging students — both for talent and dealflow.

Student entrepreneurship 2.0 is here. There are more structured paths to success for students interested in starting or joining a startup. Founders have more opportunities to garner press, seek advice, raise capital, and more. Venture funds are increasingly leveraging students to help improve the three F’s — finding, funding, and fixing. In my personal view, I believe it is becoming more and more important for venture funds to gain mindshare amongst the next generation of founders and operators early, while still in school.

I can’t wait to see what’s next for student entrepreneurship in 2019. If you’re interested in digging in deeper (I’m human — I’m sure I haven’t covered everything related to student entrepreneurship here) or learning more about how you can start or join a startup while still in school, shoot me a note at sxu@dormroomfund.comA massive thanks to Phin Barnes, Rei Wang, Chauncey Hamilton, Peter Boyce, Natalie Bartlett, Denali Tietjen, Eric Tarczynski, Will Robbins, Jasmine Kriston, Alicia Lau, Johnny Hammond, Bruno Faviero, Athena Kan, Shohini Gupta, Alex Immerman, Albert Dong, Phillip Hua-Bon-Hoa, and Trevor Sookraj for your incredible encouragement, support, and insight during the writing of this essay.


Source: The Tech Crunch

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Bowery, an indoor farming startup, raises $90 million more, including to counter a SoftBank-funded rival

Posted by on Dec 12, 2018 in Bowery, Food, funding, General Catalyst, GV, Plenty, Recent Funding, Softbank Vision Fund, Startups, TC | 0 comments

When in July of last year, SoftBank’s Vision Fund led a whopping $200 million round in the Silicon Valley startup Plenty, investors behind a competing indoor farming startup across the country, New York-based Bowery, were left reeling. Just one month earlier, they’d closed on a round that brought Bowery’s total funding to $31 million. As one of Bowery’s backers told us in the immediate aftermath of Plenty’s enormous round, SoftBank’s involvement “definitely gives you pause.”

Its involvement has not, however, prompted investors to give up. On the contrary, Bowery just today announced that it has raised $90 million in fresh funding led by GV, with participation from Temasek and Almanac Ventures; the company’s Series A investors, General Catalyst and GGV Capital; and numerous of its seed investors, including First Round Capital.

It’s easy to understand investors’ unwavering interest in the company and the space, given the opportunity that Bowery, and Plenty, and hundreds of other indoor farming startups, are chasing. As Bowery outlined in a post this morning, “traditional agriculture uses 700 million pounds of pesticides annually, and fresh food takes weeks” and sometimes longer to land on the dinner table. Along the way, terrible things sometimes happen, including E.coli outbreaks, like the kind recently linked to the sale of romaine lettuce in the U.S.

Meanwhile, Bowery, which is growing crops inside two warehouses in New Jersey, can promise people in New York that their bok choy didn’t travel far at all.

Bowery also appears to be gaining the kind of momentum that VCs want to see. According to the company, it started life with five employees three years ago; today its staff has ballooned to 65 people. It has established a distribution partnership with Whole Foods. It has partnered with sweetgreen, the fast-food chain known for its farm-to-table salad bowls, and Dig Inn, a New York- and Boston-based chain of locally farm-sourced restaurants.

Unsurprisingly, the company says it plans to partner with new retail, food service and restaurant partners in the new year, too.

Bigger picture, Bowery says it plans to build a “global distributed network of farms” that are connected to each other through a kind of operating system, and that it has already begun work on the first of these outside the tri-state area.

Whether it succeeds in that vision is anyone’s guess at this point. It’s hard to know how big an impact that Bowery, or Plenty (which plans to build 300 indoor farms in or near Chinese cities) or any of its many competitors will ultimately have. But given that we’ll need to feed two billion more people by 2050 without overwhelming the planet, it’s also easy to understand from a humanitarian standpoint why investors might be keen to write these companies big checks. In fact, the rest of us should probably be rooting them on, too.


Source: The Tech Crunch

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Free societies face emerging, existential threats from technology

Posted by on Oct 20, 2018 in Airbnb, Artificial Intelligence, Column, cybernetics, echodyne, Emerging-Technologies, evolv technology, Fortem Technologies, General Catalyst, machine vision, online identity, pakistan, Science and Technology, shasta ventures, TC, Technology, Uber, United States | 0 comments

Silicon Valley is currently, and correctly, under fire for the failure of leading platforms such as Facebook, Google and Twitter to protect against the spread of disinformation, hate speech and efforts to disrupt our elections. I don’t know why these companies behaved as they did.

But whatever the reason – naiveté, excessive focus on near-term profits, or simply a lack of proper attention on mind-numbingly complex problems – it’s clear they have to do a better job of making sure technology makes our world safer, freer and more stable rather than the opposite.

But it’s not just these big companies that need to up their game. As venture capitalists, we need to do more to find, fund and help a new generation of technology companies that build the infrastructure and applications to deal with technology-based threats to stability and security. Yes, Facebook and Twitter must deal with unintended consequences of their massive platforms. But if history is any guide, it will be new companies that come up with the bold new visions and business models to address fundamental, once-in-a-generation challenges.

I don’t use the word fundamental lightly. Just think about all security failures you now take for granted, that once would have been unthinkable. Our PCs and other devices are patched every few hours or days, rather than every few months. We are routinely warned by merchants—sometimes even credit agencies!—to change our passwords because they’ve been hacked. We are relieved, rather than annoyed, when the credit card company calls to verify our recent purchases.

We feel abused when we read how our online identity has been monetized without our knowledge or used to micro-target us with ads by groups seeking to polarize our politics. And there are deeper-seated concerns, like the nagging fear of a terror attack or a lone-wolf gunman when we enter an airport or let our teenage kid go to a concert. Our physical and cyber selves feel threatened on a regular basis. Like it or not, we are too often under attack, as individuals, consumers and as citizens. But like the proverbial frog in a pot, we don’t seem to notice the rising water temperature.

If we stick with the status quo, that water is only going to get hotter. We already know the Russians (and the Iranians, and the North Koreans) are again targeting U.S. voting systems in advance of the midterm elections, and the Russians also have the ability to shut down large parts of our electric grid. It hasn’t happened yet, but will Americans start worrying about congregating in public spaces, whether it is to protest, attend large rallies, or go to concerts? I grew up in Pakistan, where horrific gun and bomb attacks on civilians are more common. I can’t help fear the same scourge will come to our shores.

If this sounds like scare-mongering, so be it. There is no getting around the fact that more people have more ways to do large-scale damage than ever before. Thankfully there are technologists and entrepreneurs working diligently to find ways to defend us from such harm.

Our portfolio company Evolv Technology, for example, is using advanced sensors and AI in weapons detection systems that can screen hundreds of people per hour  without making them slow down or empty their pockets and purses. Companies like ShieldAI, Convexxum, Echodyne and others are using machine vision and advanced radars/lidar technologies to prevent people from being put in harm’s way by drone-type attacks.

A drone flying and filming over Dubai

Funding such companies can be different than the deals Silicon Valley VCs are used to.  In most cases, these firms must collaborate with trusted government actors, intelligence agencies and enforcement organizations–not to mention comply with their regulations. To be successful, they need to share information with other companies, including competitors.

But I’m betting the trouble will be well worth it. History tells us that companies that overcome big obstacles to create new markets often enjoy years of rapid growth, and few competitors.

Most of all, I believe a nervous world is ready to reward companies that make it feel safer. Just as Uber and Airbnb caught the front edge of the sharing economy boom, companies whose mission is aligned with a change in the societal zeitgeist can create huge value.

Investors are already doing their part. DCVC recently invested in Fortem Technologies, and Shasta Ventures in AirSpace, which make Star Wars-ish systems of AI-based drones whose only role is to automatically detect, identify, and slam into drones that wander into unauthorized airspace — say, over a private estate, or a factory.

General Catalyst invested in Mark43, which makes a cloud platform to help police departments and their detectives investigate crimes more quickly and effectively.

While these mission-oriented companies may not provide the fastest or steepest ramp to riches, the best of these mission-oriented companies will create technology that affects each of us every day, and businesses that will be resilient to economic cycles, fads and fashion. For investors, it’s a twofer of enlightened self-interest — both as investors, and as citizens. To paraphrase JFK, we should invest in such companies “not because it is easy, but because it is hard.”


Source: The Tech Crunch

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TC Sessions: AR/VR early-bird sale extended to Friday

Posted by on Sep 24, 2018 in Artificial Intelligence, Ashley Crowder, Events, Facebook, founders fund, General Catalyst, niko bonatsos, survios, TC, TC Sessions: AR/VR 2018, ucla, virtual reality | 0 comments

You heard it here first! Early-bird ticket sales are extended till September 28 for TechCrunch Sessions: AR/VR on October 18 at UCLA. Don’t miss out on the biggest savings for this event — book your $99 tickets here. Students, get your tickets for just $45 when you book here.

What’s going to happen at TC Sessions: AR/VR you ask?

You’re going to hear from today’s leading innovators, watch exclusive demos onstage and network with some of the world’s leading minds in augmented/virtual reality. Who wouldn’t want that?

Onstage discussions include Augmenting the Office, Building Inclusive Worlds, Your Virtual Self, and Ditching Headsets for Holograms. And you’ll get to hear from leading industry minds, including:

Ashley Crowder (VNTANA)
Cyan Banister (Founders Fund)
Yelena Rachitsky (Oculus)
Nathan Burba (Survios)
Ficus Kirkpatrick (Facebook)
Matt Miesnieks (6D.AI)
Niko Bonatsos (General Catalyst)

When you tweet your attendance through our ticketing platform, you’ll save an additional 25 percent (for early-bird tickets) and 15 percent (for student tickets).

Check out the full agenda and speaker list here.


Source: The Tech Crunch

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Gawker is relaunching in early 2019

Posted by on Sep 11, 2018 in bryan goldberg, bustle, Deadspin, digital media, Gawker, Gawker Media, General Catalyst, google ventures, kotaku, Media, Officer, PayPal, Peter Thiel, social + capital, TC, univision, Venture Capital | 0 comments

After a two-year hiatus, Gawker is coming back. Peter Thiel, be damned.

Bustle-owner Bryan Goldberg, who paid $1.35 million for rights to the defunct gossip site in a bankruptcy auction in July, wrote in a memo to Bustle staff Tuesday that Gawker would relaunch next year with Amanda Hale, the former chief revenue officer of The Outline, as its publisher.

A spokesperson for Bustle confirmed the hiring and upcoming launch to TechCrunch, adding that Hale “will be responsible for building out the sales and marketing teams, and developing the overall strategy for the brand. Her first project will be to solidify a plan to ensure the Gawker archives have a safe and permanent home. We will be investing significant resources in this relaunch, and we will continue to make further announcements as plans progress.”

According to the memo, the new Gawker will take advantage of Bustle’s resources, technology and business platform.

“We won’t recreate Gawker exactly as it was, but we will build upon Gawker’s legacy and triumphs — and learn from its missteps,” Goldberg wrote. “In so doing, we aim to create something new, vibrant, highly relevant, and worth visiting daily … completely distinct from our other properties and sit within a separate corporate subsidiary,”

Here’s the full memo, obtained by The Wall Street Journal’s Ben Mullin:

Goldberg, a man, is the founder of Bustle, a site that creates content for millennial women. He’s raised some $80 million in venture capital for the site, which appears to have found its footing after a rough start. In 2014, one year after Bustle’s launch, Goldberg penned a painfully tone-deaf blog post announcing a $6.5 million round:

“Isn’t it time for a women’s publication that puts world news and politics alongside beauty tips?” he wrote. “What about a site that takes an introspective look at the celebrity world, while also having a lot of fun covering it? How about a site that offers career advice and book reviews, while also reporting on fashion trends and popular memes?”

Google Ventures pulled out of that round for ethical reasons following the blog post. Goldberg went on to ink deals with several VCs, including GGV, General Catalyst, Saban Capital Group and Social Capital.

As for Hale, she left The Outline in May amid struggles at the digital media startup. Just last week, The Outline announced it was laying off its remaining staff writers and would rely solely on freelancers. It’s likely nearing a shutdown, despite having raised $5 million in venture capital funding earlier this year.

The Outline’s reported struggles don’t hold a candle to Gawker’s tumultuous past.

Gawker parent company Gawker Media was forced to file for Chapter 11 bankruptcy protection when a Florida court ordered it to pay $140 million in damages to Hulk Hogan, who had sued Gawker for publishing his sex tape. The lawsuit, and two others against Gawker, was bankrolled by Peter Thiel. The PayPal co-founder and Silicon Valley billionaire had a long-standing vendetta against the site since it reported that he was gay before he had come out publicly.

In its heyday, Gawker attracted 23 million visits in a month, according to Wikipedia. Based in New York and founded in 2003, Gawker Media also ran Jezebelio9Deadspin and Kotaku — all of which were acquired by Univision for $135 million following the infamous lawsuit.


Source: The Tech Crunch

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How Airbnb went from renting air beds for $10 to a $30 billion hospitality behemoth

Posted by on Aug 12, 2018 in affordable housing, Airbnb, brian chesky, Co-founder, Culture, Denver, DST Global, economy, General Catalyst, joe gebbia, Lyft, New York, New York City, paul graham, San Francisco, sharing economy, TC, Uber, vacation rental, Y Combinator, Yuri Milner | 0 comments

Happy 10th anniversary Airbnb.

When we first wrote about the company a decade ago, it was a spare website cobbled together by its founders for the low low price of $20,000.

In the years since, the marketplace Airbnb created has radically transformed the rental landscape in cities, created an entirely new hospitality market and surged to a valuation of roughly $31 billion.

As it prepares for an initial public offering in 2019, it’s worth a look back on how far the company has come, and how its founders’ vision for a new type of way to monetize unused apartment space for budget travelers has become the engine driving a new kind of travel and new experiments in modern living (for better or worse).

When we wrote about the company in 2008, the pitch for Airbnb’s services had already been set.

AirBed and Breakfast will definitely appeal to younger travelers, and conventioneers who can’t find a regular hotel room. In overbooked Denver, where 20,000 people will be descending for the Democratic National Convention, hotels are already sold out. More than 600 people have found alternative accommodations through AirBed and Breakfast, and 50 to 100 new listings appear every day. Prices range from $20 a night for an airbed to $3,000 for an entire house.

Indeed, it’s likely that there would have been no Airbnb without the 2008 presidential campaign. The election created a serendipitous confluence of an incredibly unique historical moment where a groundswell of demand could be met by a new type of supply and Airbnb’s co-founders Brian Chesky and Joe Gebbia were there to capitalize on the opportunity.

It’s good to remember that in 2008, the co-founders were claiming that they could barely make rent. And they were certainly strapped for cash for the fledgling business. There, again, the 2008 election presented them with an opportunity.

“The world thought we were crazy,” Gebbia recalled in an interview.

But the RISD grads had that $20,000 in seed funding and politically themed cereal boxes to tide the business over. It was the cereal gimmick — selling Obama O’s and Captain McCains – for $40 a box that got them the hearing from Y Combinator co-founder Paul Graham and acceptance into the accelerator.

Three years later, the business was a rocket ship. It had pulled in a (whopping for the time) $112 million investment from Andreessen Horowitz, DST Global, and General Catalyst and was already on the path to bulldozing the old models of hospitality with a shared vision for visiting any city anywhere in the world.

“Airbnb, with its strong management team and engaged worldwide community is on a path to become a transformational company,” said Yuri Milner founder of DST Global, in a truly understated statement at the time.

So transformational, in fact, that the company would go on to raise billions more atop that hundred-million-plus Series B round.

But that success has not come without a certain cost.

For all of the ways in which Airbnb claims to be unlocking the local economy, it can’t avoid the accusations that it has locked out local renters in favor of financial speculators who are buying up apartments to lease to a traveling class rather than sustain a viable and vibrant neighborhood for the actual citizens that live there.

One study, published earlier this year (and funded by the AFL-CIO and the Hotel Trades Council), indicated that the company significantly impacted rental prices in New York.

… the study estimates that Airbnb has driven up long-term rental prices by 1.4 percent, or $384 per year, for the median New York City renter. The research suggests that both restricted availability in the long-term rental market and increased financial incentives in the short-term rental market account for this increase.

It’s those kinds of figures that have led to the sometimes aggressive pushback from local real estate advocates. Indeed, it was just about three years ago that San Francisco protestors from the Coalition on Homelessness took over Airbnbs headquarters to protest what they viewed as the company’s complicity in the surge in evictions and homelessness in the city.

In a 2015 letter to New York legislators, Airbnb’s public policy chief at the time, David Hantman, wrote, “The majority of hosts use the money they earn to pay their bills and stay in their homes.”

And in a separate blog post (now apparently lost in a site redesign) around the same time, Hantman took Airbnb’s argument further. “In fact, Airbnb makes cities more affordable,” Hantman was quoted as writing in Vice. “Sixty two percent of Airbnb hosts in New York said Airbnb helped them stay in their homes and the typical Airbnb host in New York earns $7,530 per year — a modest, but significant amount that can make a huge difference for families.”

The company’s kerfuffles with regulators (a sort of mirror image of the woes faced by fellow marketplace service Uber and its American competitor Lyft) have not effected the way investors are valuing the virtual room-for-rent-filled house that Chesky and Gebbia have built.

As we reported earlier this year, Airbnb raised nearly $4.4 billion in funding as a private company, to date, and reports say it is on track to make between $3.5 billion and $4 billion in revenues this year from its business connecting travelers with private homes and an array of other related services.

That’s a long, long way from matching would-be attendees to the 2008 Democratic National Convention with air mattresses or sofas in Denver.


Source: The Tech Crunch

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Fractyl Labs raises $44 million in Series D to develop a treatment for type 2 diabetes

Posted by on Nov 30, 2017 in Bessemer Venture Partners, Biotech, diabetes, diabetes type 2, Fractyl Labs, funding, Fundings & Exits, General Catalyst, google ventures, GV, Health, IDO Fund, Mithril Capital Management, Science, Startups, TC, True Ventures | 0 comments

 Fractyl Labs, a Lexington, Massachusetts-based startup developing treatments for diabetes, has raised $44 million in Series D financing from a slew of VC firms, including GV, True Ventures, the IDO Fund, General Catalyst, Bessemer Venture Partners, Domain Associates, Mithril Capital Management, Emergent Medical Partners, L.P., and Deerfield Management Company, L.P. Fractyl has been working on… Read More
Source: The Tech Crunch

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