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Network Updates, 30 Mar. 2017

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Upcoming Events

  • Apr. 2-7: Spring Modules, London, UK. April 4, 6:30pm cocktail reception: Email Kirsten Owens to RSVP
  • April 26, 7pm: Happy Hour at Angel Capital Assn. Summit, San Francisco. RSVP on TENx
  • May 4: Bay Area Women Fellows Breakfast, San Francisco
  • May 15: 7-week Venture Deals online course with Brad Feld & Jason Mendelson (free)

Headlines

  • In VCJ,  Clint Korver (Class 14) applies decision analysis to the “wisdom” of doubling down on an initial investment
  • Ramon Zeng (Class 18) interviewed about investing in China technology startups
  • Ken Elefant (Class 5) joins Office Hours for TechCrunch Include
  • Corey Ford (Class 17) says, “Hurry up and fail” in interview for itel.am
  • Gordon Ritter (Mentor Class 15) and Jake Saper (Class 20) advocate for AI in Forbes
  • NXTP Labs (Ariel Arrieta, Class 18; Francisco Coronel, Class 20; Pablo Salazar Rojo, Class 15) agtech accelerator starts 2nd cohort as NXTP and SproutX arrange LatAm–Australia agtech startup exchange program
  • On the move: Daniel Blomquist (Class 16) now Operating Partner at Creandum • TJ Rylander (Class 12) now at Winter Partners
  • Podcasts & speaking engagements: Vikas Goyal (Class 17) to speak at CMO Summit • Rob Coneybeer (Class 2) has 2 new podcasts in his Sirius XM series • Numerous Fellows & Mentors to speak at Angel Capital Association Summit in SF
  • This week’s blog selections: Guy Turner (Class 17) writes about marketplace startups and investing in them • Josh Breinlinger (Class 21) provides a brief yet informative analysis of network effects in startup markets
  • Job openings: Matter (accelerator) • Kapor Capital (summer interns) • Innovation Endeavors • Matterport • Genomics Medicine Ireland • Invitalia Ventures

On VCJ, Clint Korver (Class 14) Applies Decision Analysis to the “Wisdom” of Doubling Down on an Initial Investment

KFR Volume 3VCJ logo

In 2012, Clint Korver Clint Korver (Class 14) shared Ulu Ventures’ approach to investment decisions in a Kauffman Fellows Report article, “Applying Decision Analysis to Venture Investing.” On the Venture Capital Journal website this week, he builds on his 2012 statement that “venture firms will produce better and more consistent results by using disciplined frameworks to assist the investment process” with an article titled “Questioning the Conventional Wisdom of the Reserve Fund.” (PDF available here for those without VCJ online access.)

For VCJ, Clint outlines a decision analysis approach to the conventional wisdom that it is always good to double down on early investments. In fact, he explains, doubling down is only helpful for certain situations, while “having the courage of your convictions and committing more capital earlier in the cycle is

the better path to VC nirvana, especially for small, seed-stage funds, such as Ulu Ventures.”

After sharing the math showing why “more capital earlier” is usually better, Clint identifies three key exceptions when doubling down is better: large, successful VC players that need to keep all their money working; an unknown entrepreneur you have reason to believe strongly in; and, in some cases, poorly performing funds.

Family offices and limited partnerships usually know how much of their fund is reserved for follow-on investments and how they decide whether to invest in a follow-on round, but rarely have analyzed “the actual returns of [your] reserve strategy”—adding that key piece, Clint shows, can inform better investment decisions.


Ramon Zeng (Class 18) Talks about China’s Internet Technology Sector

In an interview for Cheung Kong Graduate School of Business’s magazine, “No Easy Rides, DCM Ventures’ Ramon Zeng on How Chinese Startups Are Managing to Thrive,” Ramon Zeng (Class 18, General Partner, DCM Ventures) discusses China’s internet-technology startup scene from an investor’s perspective. Relatively undeveloped sectors, such as China’s brick-and-mortar retail industry, offer opportunities for entrepreneurs and investors alike—particularly those willing and able to capitalize on the growth of mobile internet. “In many areas we have first mover advantage. We can apply the new technology faster because no time is needed for us to get rid of the old ones.” Ramon’s responses focus on the specifics of the Chinese internet startup ecosystem, from growing awareness of intellectual property rights to the importance of being local when it comes to improving leadership efficiency.


Ken Elefant (Class 5) Joins Office Hours for TechCrunch Include

TechCrunch IncludeYesterday, Ken Elefant (Class 5), VP and Managing Director of Intel Capital, served as one of the firm’s mentors, offering advice to underserved and under-represented startup founders during TechCrunch’s monthly Include Office Hours in San Francisco. As part of TechCrunch’s Include initiative, which aims to promote diversity, the Office Hours program arranges meetings between under-represented founders and top VCs and angels, so that founders can receive feedback and build new connections. TC’s Include Office Hours are open to startups based in San Francisco and New York City.


Corey Ford (Class 17) Says, “Hurry up and fail” in Interview for itel.am

In the itel.am interview “American Investor Talks Unspoken Rules of Silicon Valley,” Corey Ford (Class 17), Managing Director at Matter Ventures, talks strategies for international startups looking to enter the Silicon Valley ecosystem. Because “most entrepreneurs fail, regardless of nationality,” Corey argues, and because it takes years to determine whether a venture is successful, entrepreneurs should “hurry up and fail so that [they] get another chance.” Exposure and connections, he says, are the keys to success for entrepreneurs outside the United States. To illustrate that point, he has to look no further than two of his own recent investments. He found one by “just looking around on the Web to find who’s doing interesting work,” and the other by following a business school classmate’s work. Similarly, Corey says, Matter assists startups in building connections by providing them with “valuable contacts with some of the top people in Silicon Valley and media.” As for exposure, Corey believes that doing one’s best is the most effective way to get attention, no matter where one is based.

Matter Ventures is a San Francisco-based startup accelerator that seeks to “support media entrepreneurs building a more informed, connected, and empowered society” by providing seed money and a five-month development program. It is accepting applications now through April 3 for its 7th cohort. Details below in the jobs section.


Gordon Ritter (Mentor Class 15) and Jake Saper (Class 20) Advocate for AI in Forbes

Forbes logoOn the heels of the recent announcement that Emergence Capital Partners is co-sponsoring a Machine Learning Startup Competition with Google Cloud, Gordon Ritter (Mentor Class 15) and Jake Saper (Class 20) of Emergence wrote an article for Forbes, “How AI Can Prove Workers’ Best Defense in the Race Against Automation.” They start with “a harsh reality: most American jobs aren’t going to Mexico, China or another foreign country, they’re being automated.” As much as half of all paid human activities are automatable, according to a recent McKinsey study, which notes that “almost every occupation has partial automation potential.” While that full potential will take decades to achieve, the impending job loss poses a problem that Jake and Gordon believe “demands a massively scaled solution.”

They argue that one such solution is AI-based “Coaching Networks,” which will “learn workers’ best habits and practices [and] convey the knowledge they’ve gained to workers on the job and in context.” The effect is to help workers learn on-the-job, in real time—not in theory, but in practice—thus increasing workers’ skill levels, which in turn can help them stay employed. Companies like Chorus.ai, DigitalGenius, Upskill, and Pristine are already putting this approach into practice—for instance, by equipping manufacturing workers with Google Glass to provide real-time task-related checklists. In this way, say Jake and Gordon, “Coaching Networks have the power to change the way workforces learn, to accelerate training to keep pace with automation, and to upskill workers to offset jobs lost to automation.”


NXTP Labs Agtech Accelerator Starts 2nd Cohort as NXTP and SproutX Arrange LatAm–Australia Agtech Startup Exchange Program

NXTP LabsAustralian agtech hub SproutX is partnering with NXTP Labs to create an exchange program for startups to collaborate between the regions. The winning team from SproutX’s next accelerator cohort will complete a one-week immersion program in a Latin American country of its choice, hosted by NXTP Labs, which has operations in Argentina, Chile, Colombia, Mexico, and Uruguay. NXTP is headed by Ariel Arrieta (Class 18), and includes Pablo Salazar Rojo (Class 15) and Francisco Coronel (Class 20).

SproutX believes that “Latin America presents a great starting point for Australian agtech ventures planning to go global,” noting that the LatAm ag sector is “embracing some of the most advanced production technologies that are collecting invaluable data at a massive scale.” Noting that while Argentina’s agricultural sector already feeds 400 million people (compared to Australia’s 90 million), the country is “one of the few in the world that has considerable capacity to increase domestic agricultural production.”

NXTP Labs launched its own agtech accelerator last summer, the first of its kind in LatAm. It begins its second cohort next week in a 12-week program.


On the move:

  • Congratulations to Daniel Blomquist (Class 16), who is now Operating Partner at Creandum. As Daniel describes in this medium.com post announcing his move, he will now be overseeing Creandum’s three locations—Stockholm, Berlin, and San Francisco—with an eye toward providing the best possible support for the firm’s entrepreneurs. He will also manage the firm’s operations, LP relationships, investment advisory process, and fund strategy.
  • After a decade at In-Q-Tel, TJ Rylander (Class 12) is now a Partner at San Francisco-based Winter Partners, where his investment focus is database technology, analytics platforms, and cyber security. See Winter Partners’ website for their in-depth analysis of the cycle played out repeatedly in the tech sector, in which a technology moves from science to service to product, and why the firm thinks that the field of analytics is currently at a transition threshold.

Portfolio happenings:

  • Congratulations to Zach Jonasson (Class 10) and John Chen (Class 10), of Phoenix Venture Partners, who officially closed their Fund II this week. Their new fund will be focused exclusively on advanced materials startups. John reports, “We are pleased by the continued support we received from our existing LPs and strong interest in PVP II LP from new investors. The Fund is off to a great start, having already made several new investments.” [Press release]
  • Kickstart Seed Fund (Dalton Wright, Class 19) co-led the recent $3M seed round for Big Squid. “Big Squid is supercharging business intelligence tools by making predictive analytics accessible to the business user,” said Dalton, who will join Big Squid’s board. [Press release]
  • Chris Scoggins (Class 11) has joined the board of directors of Samba TV. Chris is at Oracle Data Cloud, which acquired his firm, Datalogix, in 2014. Samba’s CEO said of the appointment: “Chris is well known in our industry for his strategic thinking and data-driven decision-making. His experience building one of the largest programmatic data and attribution platforms offers our Board a perspective that will help greatly accelerate our current growth across key markets worldwide.”

Podcasts & speaking engagements:

  • Vikas Goyal (Class 17) will be a speaker at the 5th Annual CMO Summit, “the only emerging biotech event in the country specifically for Chief Medical Officer peer-to-peer learning, benchmarking and support.” The summit will be held May 10-11 in Boston; Vikas will be speaking on a panel titled “Can R&D Leadership Work More Collaboratively with Investors?“ [Press release]
  • Rob Coneybeer (Class 2) has 2 new episodes in his Sirius XM podcast series, LaunchPad. These most recent installments feature interviews with Bob Tinker of Mobile Iron, and Ian Cartabiano of Toyota’s Calty Studio.
  • Numerous Fellows and Mentors will speak at next month’s Angel Capital Association Summit in San Francisco. Tim Draper (Mentor Classes 3, 9, & 13), Steve Westly (Mentor Class 14), Mitch Kapor (Mentor Class 21), and Freada Kapor Klein (frequent Module speaker) will deliver keynotes at the event, and Claire England (Class 21), Trish Costello (KF Founding CEO), and Marlon Nichols (Class 18) will be session speakers.

This week’s blog selections:

  • Guy Turner (Class 17) makes the case that tech entrepreneurs and investors need to reinvent themselves in a recent blog post, “Investing and Building Marketplaces.” Guy offers some pointers for entrepreneurs looking to move beyond a crowded SaaS field into the marketplace. “The requisite conditions for a marketplace are trust, product standardization and potential for liquidity,” he explains.
  • In a brief, informative post titled “Understanding Network Effect Strength,” Josh Breinlinger (Class 21) illustrates the concept of “network effect”—a buzzphrase that comes up frequently during startup pitches. Using simple visuals, Josh shows how the value of network effect—in fewer words, “scaling”—is boosted by increased users or data until it reaches an equilibrium at which it stabilizes. After equilibrium is reached, however, it takes innovative effort to keep improving network effect.

Job opportunities:

If you are a Fellow or Mentor and would like to post a job at your firm or portfolio company, please email us. Jobs are removed from this list after 4 weeks.

  • Applications are open now through April 3 for Matter’s 7th accelerator class, which begins July 5 (Corey Ford, Class 17, is Managing Partner at Matter in San Francisco). Matter is grounded in the principles of design thinking, and supports early-stage media entrepreneurs and mission-aligned media institutions building scalable ventures that make society more informed, inclusive, and empathetic. Read their blog post announcing the opening of applications, and another describing the characteristics they’re looking for. Interested startups can apply online.
  • Kapor Capital (Mitch Kapor, Mentor Class 21; Brian Dixon, Class 21) is hiring 4 summer associates. The ideal candidate will be entering an MBA, PhD, or comparable graduate program in Fall 2017 (or, alternatively, going into their 2nd or 3rd year of graduate studies); applicants must have a passion for tech startups. The Round 1 application deadline was March 17; the Round 2 deadline is April 17. Read the full job description and apply on the Kapor Capital website.
  • Eyal Mayer (Class 21) forwarded a job opportunity for a “Value Creation Team Member” in Business Development at Innovation Endeavors, a VC firm looking to transform large industries. Innovation is solely backed by Eric Schmidt, Executive Chairman of Google. The Value Creation Team supports portfolio companies and is focused on building relationships with leading industry players within Fortune 500 companies. The position is based in the San Francisco Bay Area and requires 2-3 years of work history, experience with demo days or similar, and a natural ability to build strong relationships and connect with people. Read the full job description, with application information.
  • Brian Kissel (Class 7), SVP of Matterport, has announced via LinkedIn that his firm is hiring extensively across all aspects of the company in its Sunnyvale, CA office. Matterport is an immersive media technology company that builds 3D media solutions used from real estate to entertainment. The firm has built the first end-to-end media platform that allows users to easily create, modify, navigate, and build on digital representations of real places. Visit the Matterport jobs page.
  • Dan Crowley (Class 16) announced via LinkedIn that Genomics Medicine Ireland is looking for a Medical Science Liaison, responsible for identifying and developing collaborative research opportunities between GMI and clinical groups throughout Ireland. Read the full description and application information.
  • Salvo Mizzi (Class 16) reports on LinkedIn that his firm, Invitalia Ventures, is hiring an Investment Analyst. Email Salvo directly: smizzi@invitaliaventures.it.

Do you have a news story to share? Please email us: news@kfp.org.

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