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Network Updates, 4 May 2017

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  • May 11, 12:30-2pm: Chicago Chapter lunch
  • May 14: 7-week Venture Deals online course with Brad Feld & Jason Mendelson (free)
  • June 11-16: Summer modules & graduation, Classes 20-22
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Headlines

  • The Chicago Tribune interviews Ezra Galston (Class 18) on the role of karma in VC
  • 2016 HALO Report: Groups led by Juliana Garaizar (Class 18) and Claire England (Class 21) top list of most active angel networks
  • Estela Hernandez’s (Class 20) Arrowhead Innovation Fund receives $800K from New Mexico’s Catalyst fund-of-funds
  • Ernestine Fu (Class 17) interviewed in PocketGamer.biz on creating games that talk back
  • Podcasts & speakers: Fred Wilson (Mentor Class 4) gave a lecture at MIT on his life and career • Daniel Kraft (Class 13) covers the winner of the Qualcomm Tricorder X Prize on his Tech Talk NPR radio segment
  • This week’s blog selections: This week’s blog selections: Dilek Dayinlarli (Class 18) has started a weekly column in one of Turkey’s leading print newspapers • Alexandre Lazarow (Class 19) writes about Omidyar’s investment in Brazilian finTech firm GuiaBolso • Carl Fritjofsson (Class 21) shares advice from a recent Creandum trip to China.
  • Job opportunities: (CONTINUING) Kauffman Foundation seeks a Director of Entrepreneurial Knowledge Creation and Research

The Chicago Tribune Interviews Ezra Galston (Class 18) on the Role of Karma in VC

Chicago TribuneEzra Galston (Class 18), principal at Chicago Ventures, was profiled in the Chicago Tribune article “Behind the Money: Does Venture Capital Run on Karma? He Would Know—He Majored in Happiness.” Ezra explains how he turned a career as a professional poker player into a career as a venture capitalist, in part by using social media to distinguish himself. That instinct paid off, and it illustrates what has made him successful: his emphasis on relationship. He takes an “if you build it, they will come” approach; if one focuses on building genuine, valuable relationships, the rewards will come naturally. One of the largest deals Ezra has led for Chicago Ventures, SpotHero’s $4.5M Series A in 2014, grew from his relationship with SpotHero’s CEO. “I think one of the best roles someone on the more junior side can provide an entrepreneur,” he says, “is a very comfortable, genuine, private feedback loop.” In fact, that sense of comfort is how he tracks his progress: “Does the CEO, or do other executives at the company, feel comfortable calling or texting at any hour of the night with problems or issues?”


2016 HALO Report: Groups Led by Juliana Garaizar (Class 18) and Claire England (Class 21) Top List of Most Active Angel Networks

Houston Angel Network

CTAN

Congratulations to Juliana Garaizar (Class 18), Managing Director of Houston Angel Network, and Claire England (Class 21), Executive Director of Central Texas Angel Network (CTAN), whose groups tied for first place in the 2016 HALO Report‘s list of most active angel networks in the country. This ranking represents forward progress for both organizations: in 2015, CTAN came in at #3 and Houston Angel Network at #4. CTAN’s jump is no surprise—we recently reported on the network’s impressive increase in activity. Reflecting on her group’s top spot, Claire says, “CTAN’s position … reflects the intense time and effort our members commit to startups. Beyond increased funding levels, we saw record investor participation in 2016, with a 40% growth in the number of members writing checks.”

HALO ReportThe HALO Report is an annual summary of early-stage investment activities and trends in the US, produced by the Angel Resource Institute (ARI). This year’s report highlights several national trends: the number of deals by angel groups more than doubled from 2015, and pre-money valuations dropped significantly from their 2015 historic highs. Given that the median early-stage round size is $950K and the median angel group investment is $127K, syndication is increasingly important.

Nationally, approximately half of angel deals were first-time (New Co) investments, and the remaining half were follow-on funding for existing portfolio companies. “Angel groups are recognizing the need to continue to support the best companies in their portfolios,” says the co-chair of the ARI Research Committee. “Follow-on funding from venture capital and other sources are not going to be available to every company,” he says, noting that angel groups should be prepared to fund multiple rounds for any given startup before making their initial investment; “otherwise, they are going to see a much higher failure rate.”

This year’s HALO Report is the first to track the number of deals going to female- and minority-led startups. In 2016, only 17% of deals went to female-led startups, and 3% of total deals went to startups led by a minority female entrepreneur. Minority male entrepreneurs represented an impressive 25% of all reported angel deals in 2016.

Download the complete report to see, in total and by region, the deals broken down by industry sector, deal structure type, gender, and new vs. follow-on. Also included are median pre-money valuation, round size, and investment amount per angel group. [Press release/report highlights]


Estela Hernandez’s (Class 20) Arrowhead Innovation Fund Receives $800K from New Mexico’s Catalyst Fund-of-Funds

Arrowhead CenterThe Las Cruces Sun-News reports “Arrowhead Innovation Fund Receives $800,000 for High-Tech Startups” from the state’s $20M fund-of-funds, the Catalyst Fund. Combined with investment from the New Mexico State University Foundation and other private investors, Arrowhead is close to its $2M funding goal, and plans to invest in 12 companies over the next 3-4 years. Estela Hernandez (Class 20), President and Managing Director of the Arrowhead Innovation Fund (AIF), says, “The investment that we can now make in these companies is significant, but there’s an additional value that we’ll provide in the form of access to the professional networks of our board members, who come from varied areas of expertise and can accelerate the growth of these companies.”

AIF makes seed- and early-stage investments to commercialize technologies developed out of New Mexico State University as well as university-affiliated entrepreneurs, such as those who participate in Arrowhead Center’s technology incubator and other startup programs.


Ernestine Fu (Class 17) Interviewed in PocketGamer.biz on Creating Games That Talk Back

Blackstorm LabsAs we reported in March, Ernestine Fu’s (Class 17) Blackstorm Labs is doing cutting-edge development for Facebook Messenger’s HTML5-based Instant Games platform. In “Blackstorm Labs on How Game Bots and Rich Gameplay Features are Evolving Facebook Instant Games,” Ernestine talks to PocketGamer.biz about how Blackstorm is using Facebook’s recently-announced AI game bots to create “a brand new type of game experience” in the firm’s game EverWing, which users play for an hour a day on average.

EverWing‘s gaming experience is novel because can only be played from within a live chat group, so the gameplay is inherently social. In addition to chatting with each other, players can chat with the AI game bot—to control a quest, for instance—and in return, some game features will engage with players via chat. Game bots can also notify users when important game events occur. Ultimately, Ernestine says, AI game bots “will allow us to bring game characters to life outside of the game canvas, providing players with the opportunity to literally talk to our characters, just like they would other people!”


Podcasts & speakers:

  • Fred Wilson (Mentor Class 4), Managing Partner at Union Square Ventures, was the inaugural lecturer for MIT Sloan’s new General Georges Doriot Lectureship, established to “highlight topics related to venture creation, innovation, and venture capital.” Fred spoke about his life, his career, and how he got to where he is. In a follow-up blog post, he discusses why entrepreneurs and operators often don’t make good VCs. [Watch the video]
  • Daniel Kraft (Class 13) reports on the winner of the “Qualcomm Tricoder X Prize” in this week’s BioTech Nation Radio podcast from National Public Radio. The contest is described as a “$10 million competition to bring healthcare to the palm of your hand.”

This week’s blog selections:

  • Dilek's new columnDilek’s first column

    Dilek's new columnDilek in an appearance on Entrepreneurial WorldDilek Dayinlarli’s (Class 18) column, “Why Turkey Is a Very Important Entrepreneurial Hub,” recently began appearing in Hurriyet, the highly influential Turkish daily newspaper. She begins her column by talking about the proliferation of startup ventures in Turkey and musing on the way forward: “Sitting on the board of directors and being one of the few with access to the Kauffman Fellows community, I have been thinking about how to improve Turkey’s ecosystem since my very first day there.” She goes on to mention various other ecosystem hubs and reviews the history of Silicon Valley.

  • Alexandre Lazarow (Class 19) recently penned “Why We Invested: GuiaBolso” for Omidyar Networks’ Positive Returns blog. In this post, Alexandre explains why enthusiasm levels are high for GuiaBolso [website in Portuguese], a finTech company continuing to develop personal finance applications and products for the uderbanked Brazilian market.
  • Carl Fritjofsson (Class 21) wrote “Tech in China—Learnings from Scratching the Surface of a New World,” sharing advice the Creandum team gleaned from a recent trip to China. Good reading for entrepreneurs trying to break into the booming Chinese startup scene.

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.

  • The Kauffman Foundation seeks a Director of Entrepreneurial Knowledge Creation and Research who will lead the design and implementation of the Foundation’s research strategy, positioning the organization as the country’s central resource and authority on entrepreneurship research. The Foundation seeks a strategic and visionary leader, someone who can anticipate trends and identify patterns in data and evidence to shape the Foundation’s entrepreneurship strategy. This person is also charged with identifying knowledge gaps that must be closed in order to advance entrepreneurship, with a special emphasis on actionable and practical research that can inform the Foundation’s programmatic strategy in entrepreneurship. The Director will report to Victor Hwang (Class 12), VP of Entrepreneurship. Read the full job description, including application information.

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

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