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Network Updates, 11 July 2017

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Welcome to our brief, weekly Network News Update. If you would prefer to receive the monthly eBulletin only, email news@kfp.org.

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Headlines

  • Lexi Novitske (Class 22) interviewed about her Sub-Saharan tech investing experience and offers her views on new markets taking shape
  • Pascal Levensohn (Mentor Class 14 & 22) and Andrew Krowne (Class 22) explain why SAFE notes are not-so-safe
  • Snehal Patel‘s (Class 14) MyDoc aims to alleviate Singapore’s healthcare “bed crunch”
  • Scott Ford‘s (Class 11) Pepper raises $8.5M Series B and makes top of “coolest IoT startups” list
  • On the move: Jessica Straus (Class 22) is an EIR at GE Ventures • Keith Lenden (Class 16) is now at ARCH Venture Partners
  • Portfolio happenings:
    • Matthew Janopaul‘s (Class 5) Servco Pacific Capital buys Harley dealerships in Australia
    • Antonio Cianci (Class 16) & Arun Jayadev‘s (Class 16) Airlite paint given a shout-out on BBC World News
    • Venrock’s Bryan Roberts (Class 3) one of first investors in Cloudflare’s venture fund
    • Creandum’s Daniel Blomquist (Class 16) writes of Opbeat exit
    • Ralph Taylor-Smith (Class 9) adds to GE Ventures investment in Xometry
    • Ashish Gupta (Class 7) joined Minjar Cloud Solutions pre-Series A
  • Speakers:
    • Clint Korver (Class 14) and Susan Mason (Class 2) will be the guests at the next PitchPerfect “VC Chat”
    • Lak Ananth (Class 12) spoke at the Brazilian Industry Innovation Summit
    • Daniel Kraft (Class 13) to speak at Health 2.0 and SpaceCom 2017
    • Wale Ayeni (Class 18) speaking this week at the 2017 Mobile 360-Africa conference
    • Vinnie Lauria (Class 17) speaking today about Singapore’s hot startups
  • This week’s blog selections:
    • Joe Floyd (Class 18) has several posts in the “Emergence Playbook” series
    • Hana Yang (Class 20) interviews John Kim (Class 20) about his firm Amasia
    • Numerous Kauffman Fellows add their voices to the issue of bias and sexual harassment in venture
    • Alexandre Lazarow (Class 19) co-authors post on FinTech models appearing in Africa
    • Jonathon Triest (Class 20) has a new episode of Carpool.vc
  • Job opportunities:
    (NEW) Frontline Ventures seeks Head of Platform • Catalina Labs looking for a senior UX developer
    (CONTINUING) Emergence Capital hiring an associate • Johnson & Johnson Innovation seeks business development director • Wisconsin Alumni Research Foundation (WARF) looking for a Chief Venture Officer • Nexamp hiring an assistant general counsel

Lexi Novitske (Class 22) Interviewed about Sub-Saharan Tech Investing Experience, Discusses New Markets Taking Shape

Africa mapLexi Novitske (Class 22) answered a series of questions for How We Made It in Africa in “The Journey So Far: Lexi Novitske, Principal Investment Officer, Singularity Investments.” Lexi moved to Nigeria in 2012 and worked for a private equity firm before launching Singularity in 2014; the company focuses on technology-enabled, early-stage companies in Sub-Saharan Africa. But the move to Nigeria exposed her to judgement and skepticism, from family and friends she was leaving behind as well as from those she sought to work with. Despite the lack of support, she trusted her observation that “technology was building more connections between Africa and the rest of the world” enough to launch Singularity—despite knowing little about tech at the time.

Another observation she offers is that in Africa, disruption of established industries is often not the best path for startups because weak infrastructure may not offer startups equal access to consumer data and relationships with regulators; she recommends building and leveraging partnerships with major industry players. Experience has taught Lexi how important it is to be conscious of projecting biases onto investment opportunities; her solution is to “be curious about what’s going on around me, be flexible to accept different viewpoints, and to be humble enough to admit when I’m wrong.” In true Kauffman Fellows fashion, Lexi has come to see the importance of supporting the entrepreneur in her role as a VC: “The most important aspect I’ve come to learn about investing in early-stage companies is that it’s not about how much you can squeeze out on the investment terms or how you control the board—it’s about the entrepreneur.” And sometimes, Lexi notes, that means sacrificing terms, giving up a board seat, or taking a backseat role because “in the end, it is the entrepreneur who will turn a startup into a success story.”

Lexi was also interviewed by Devex when she was in Napa, California for the recent Emerging Markets Venture Forum, and invitation-only event hosted by the International Finance Corporation (IFC). Watch her short interview on Devex’s Twitter page, in which she discusses the downside of too much capital flowing into the impact investment sector with too little planning and monitoring.

And last, Lexi herself penned an article this week on This is Africa: “Africa Ripe to Pioneer Tech Approach to Regulation.” Lexi discusses the nascent market for a type of FinTech startup in Africa referred to as RegTech—using online tools to help automate and simplify corporations’ compliance efforts. African businesses face obstacles that might surprise Western investors: low-quality national identity systems and poorly integrated digital infrastructure, in addition to the ones normally mentioned, such as lack of infrastructure and banking access. RegTech startups are addressing issues such as electronic payroll and tax filing, andcross-border banking that meets the often-complex regulations in multiple countries. Governments are now adopting blockchain technology for business licenses, taxes, property transactions, and contract bidding, all of which increase transparency and reduce corruption. Helping African firms avoid large fines for noncompliance, while saving them money on their own compliance costs is a huge potential market that Lexi sees as ready for takeoff.


Pascal Levensohn (Mentor Class 14 & 22) and Andrew Krowne (Class 22) Explain Why SAFE Notes are Not-So-Safe

TechCrunch logoPascal Levensohn (Mentor Class 14 & 22), founder of Levensohn Venture Partners and Managing Director at Dolby Family Ventures, and Andrew Krowne (Class 22), Principal at both firms, wrote a guide to “Why SAFE Notes Are Not Safe for Entrepreneurs” in TechCrunch. Y Combinator devised SAFE notes in 2013 to address “many of the problems with convertible notes while preserving their flexibility.” SAFE (“simple agreement for future equity”) notes avoid these problems because they are not a debt instrument; investors receive cash or “company stock at a later date, in connection with a specific event.” The goal is to enable startups to raise the money they need after formation, without taking as long or costing as much as convertible notes.

The problem, Pascal and Andrew explain, occurs when the startup enters an institutional-priced equity round without having tracked or worked out the implications of all the SAFE notes—likely issued with differing valuation caps. Having several rounds of notes creates a “waterfall” dilution effect in which the valuation is postponed repeatedly until the full consequences are forgotten or too complex to grasp easily. And the consequences can be dramatic: potential investors may pass when they realize how little of the company will be left after the priced equity round, or the CEO may be left owning much less of the company than expected. The solution? “Have company counsel prepare a pro-forma cap table of the company,” preferably before any notes are issued, but certainly before beginning a priced equity round. [Learn more about SAFE notes from Y Combinator]

Pascal also wrote a blog post, “Unintended Consequences When Safe and Convertible Notes Go Awry,” to address “numerous constructive comments” the pair received from their article.


Snehal Patel’s (Class 14) MyDoc Aims to Alleviate Singapore’s Hospital “Bed Crunch”

MyDoc logoBioSpectrum Asia profiled Snehal Patel’s (Class 14) MyDoc, a mobile telemedicine platform, in “Guardian–MyDoc’s Partnership: An Answer to Growing Singapore’s Population Health Needs.” Singapore suffers from “bed crunch”—high bed occupancy rates at public hospitals. Causes include an aging population and ER trips for non-emergencies; the combination not only poses a serious problem for those with real medical emergencies, but raises health care costs for everyone. Snehal co-founded MyDoc in 2011 to “simplify access and delivery of healthcare solutions for both patients and doctors,” and in 2015 implemented a significant partnership with Guardian Health & Beauty, a leading chain in Singapore.

MyDoc’s mobile services now offer consumers access to Guardian’s pharmacists and to virtual health consultations with Singapore-based doctors; it is the country’s first public digital health consultation service. Singapore seems to be a great place to launch this endeavor: a recent survey showed that the percentage of seniors who use digital health tools is an incredible 73%. By empowering consumers through information and choices before they need medical intervention, Snehal aims to make it “easier to access and provide quality health to the whole of Singapore.”


Scott Ford’s (Class 11) Pepper Among CRN’s Coolest IoT Startups of 2017

Pepper logoCongratulations to Scott Ford (Class 11), Managing Director at OpenAir Equity Partners and co-founder and CEO of Pepper, for making the top of CRN’s10 Coolest IoT Startups of 2017 (so far).” Undoubtedly playing a major role in CRN’s decision was Pepper’s $8.5M Series B in March with the simultaneous debut of Pepper OS, designed to “help users organize and connect IoT devices and services in their homes.” The Internet of Things is exploding, with a recent Intel forecast predicting 200 billion devices by 2020—100 times the number in 2006. Scott says Pepper’s service delivery platform will “manage our connected lifestyles in a way that’s easy—but also takes advantage of the interoperability across IoT devices and services.” OpenAir was one of the Series B investors, having worked with Pepper since the firm’s Series A in 2014. Scott emphasizes that while Pepper’s scope may be global, the goal is “to develop human-centered IoT experiences.” [Press release]


On the move:

  • Keith Lenden (Class 16) is now a Venture Partner at ARCH Venture Partners in San Francisco, focused on biotechnology and pharmaceutical investments.
  • Jessica Straus (Class 22) has moved from NVCA to GE Ventures in the San Francisco Bay Area as an Entrepreneur in Residence. During her tenure at NVCA, Jessica worked with the board to launch the Diversity Task Force, a national initiative encouraging greater diversity and inclusion in the industry recognized by the White House in 2015; she later published research on VC demographics and created legal resources to help VCs improve diversity in order to enhance business outcomes.

Portfolio happenings:

  • Matthew Janopaul (Class 5), Managing Director of Servco Pacific Capital (SPC), commented on the firm’s recent acquisition of two Harley Davidson dealerships in Western Australia. Matthew says that the investment is “a validation of the story behind SPC—seasoned entrepreneurs are looking for patient, long-term capital that is highly differentiated from traditional private equity. Speaking of the firm’s long-term investment approach, he says, “The teams don’t have immediately worry about a forced sale in three to five years due to PE fundraising cycles or partnership dynamics.”
  • Class 16 Fellows Antonio Cianci and Arun Jayadev founded Airlite in 2013; the firm’s signature product, Airlite paint, got a shout out on BBC World News this week. The segment discusses London’s Bird Street, “the World’s First Smart Street,” which includes pressure-sensitive sidewalks that capture kinetic energy to generate electricity as well as making use of Airlite paint, which eliminates 89% of pollutants from of the air.
  • Bryan Roberts (Class 3), Partner at Venrock, is one of the first investors in Cloudflare’s $100M venture fund. The fund will invest in startups building applications on Cloudflare’s apps platform. Bryan says, “Building on the success of other app platforms like Java and the iPhone App Store, Cloudflare is giving entrepreneurs the opportunity to rethink and shape how the next generation of Internet companies get built.”
  • Daniel Blomquist (Class 16), Operating Partner at Creandum, wrote “Creandum-backed Opbeat Acquired by Elastic” on Medium.com. Elastic, which specializes in analytics for application data, was a natural fit, as Opbeat’s product enables companies to manage the performance and availability of their software applications. As Daniel puts it, the purchase allows Elastic to “provide analytics and insights on the applications that are generating the data.”
  • Ralph Taylor-Smith (Class 9), Managing Director at GE Ventures has added to the firm’s existing investment in Xometry (pronounced “zometry”; rhymes with “geometry”) in the firm’s latest $15M raise. The firm is an online marketplace for “custom-manufactured parts using 3D printing and machine learning to generate instant price quotes.” Xometry streamlines what has traditionally been a time-consuming and costly part of prototyping. Ralph says, “We’re thrilled to continue to expand our relationship with Xometry. Its easy-to-use interface is being deployed across GE business units to deliver high quality parts to a number of industries.” [Robotics & Automation News story]
  • Ashish Gupta (Class 7), co-founder of Helion Ventures, participated in Minjar Cloud Solutions’ pre-Series A round. Minjar offers “an intelligent cloud operations platform, Botmetric, that acts as a virtual cloud engineer,” enabling companies to reduce the cost of day-to-day cloud operations. The firm will use the new funds to expand operations within the US, having previously raised $900K in seed funding in March of 2016. [VC Circle story] [Times of India story]

Speakers:

  • Clint Korver (Class 14), Managing Director of Ulu Ventures, and Susan Mason (Class 2), Managing Partner at Aligned Partners, will be the featured guests at the next PitchPerfect “VC Chat,” addressing the question: What are the challenges for venture-backed startups? The event will take place in Mountain View, California on July 24.
  • Lak Ananth (Class 12), Managing Director of next47, was a speaker at the 7th Brazilian Industry Innovation Summit. The event was organized by the National Confederation of Industry in its effort, throughout Brazil’s recent political and economic crisis, to have both industry and government “carry on the promotion and implementation of innovative projects that involve greater risk and have no immediate impacts.”
  • Daniel Kraft (Class 13) will speak at two upcoming conferences. Health 2.0, the “premiere showcase and catalyst for the advancement of new health technologies,” announced that Daniel will be a keynote speaker at its October conference in Santa Clara, California. He will also speak at SpaceCom 2017 in December in Houston, Texas. SpaceCom, short for “space commerce,” is focused on the applications of space technology for Earth-based use.
  • Wale Ayeni (Class 18), Senior Investment Officer at IFC Venture Capital (part of the World Bank), is speaking this week at the 2017 Mobile 360-Africa conference in Dar Es Salaam, Tanzania. The conference will examine the role of government and industry in delivering digital transformation; highlights the companies and projects leading the digitization of Africa; and takes an in-depth look into mobile money and FinTech. [Arab News story]
  • Vinnie Lauria (Class 17), Founding Partner of Golden Gate Ventures, is speaking today at the Singapore Business Review’s annual “SBR Hottest Startups Panel Briefing.” Vinnie will participate on the panel “Show Me the Money,” sharing his insights on being a founder, “growth hacking,” and fundraising.

This week’s blog selections:


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 shown here for 4 weeks unless otherwise requested.

  • (NEW) Dublin, Ireland-based Frontline Ventures (Will Prendergast, Class 14; William McQuillan, Class 21; Shay Garvey, Mentor Class 21) is hiring a Head of Platform. Frontline Ventures is an early-stage firm focused on “European B2B companies with global ambitions.” The goal of this position is to manage and connect Frontline’s network of entrepreneurs, LPs, and co-investors “to ensure our portfolio of companies are learning faster than just the speed of experience.” Read the full job description.
  • (NEW) Gayathri Radhakrishnan (Class 16) is hiring a Senior UX Designer to join her team at Catalina Labs. This person will “lead the design direction for our product [Wixi] by placing the user at the center of the design process.” See the full job description online.
  • (CONTINUING) Jeff Calcagno (Class 11), Senior Director, New Ventures at Johnson & Johnson Innovation, has a job opening for a Director-level business development person—preferably with PhD or MD-PhD and a few years of license deal experience—to focus primarily on biopharma external innovation sourcing and deal-making. (Note that despite the job title “Director of New Ventures,” this is a business development role and not a venture investing role.) See the J&J website for a full job description and qualifications.
  • (CONTINUING) Emergence Capital is hiring an Associate to join its investment team. At Emergence, Associates drive the sourcing process, allowing them to work closely with every investor on the team and work with every portfolio company. Associates also support diligence efforts and drive the development of new investment themes. See the full job description.
  • (CONTINUING) The Wisconsin Alumni Research Foundation (WARF) is seeking an inaugural Chief Venture Officer (CVO). This person will be responsible for growing the direct-investment portfolio by leading deal origination across a variety of sectors and asset classes, supporting the commercialization of discoveries at the University of Wisconsin – Madison (UW-Madison). WARF is a 501(c)(3) organization with $2.7B AUM. The CVO will establish and manage a small team; requirements include 10+ years of direct investing experience. See the full job description [scroll down and click on “Chief Venture Officer” from the linked page]. Application deadline: July 31.
  • (CONTINUING) Zaid Ashai (Class 13) announced on LinkedIn that his firm, community solar developer Nexamp, is looking to hire an assistant general counsel. See the Nexamp website for details.

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

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