Network Updates, 13 Apr. 2017

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Upcoming Events

Log into TENx for complete details and RSVP information for all KF events, unless noted.

  • April 26, 7pm: Happy Hour at Angel Capital Assn. Summit, San Francisco. RSVP on TENx
  • May 4: Bay Area Women Fellows breakfast, San Francisco (email Hana Yang, Class 20)
  • May 14: 7-week Venture Deals online course with Brad Feld & Jason Mendelson (free)
  • June 11-16: Summer modules & graduation, Classes 20-22 (more to come)
  • June 23: New York Regional Chapter breakfast
  • September 25: New York Regional Chapter breakfast
  • December 8: New York Regional Chapter breakfast

Can’t log into TENx? Contact Remi Morita or John McIntyre for assistance or event details.


  • Steve Kaplan (KF Dean) and Correlation Ventures both offer new measures of VC performance
  • Alexandre Lazarow (Class 19) surveys attitudes for insurance technology sector in emerging markets
  • Pascal Levensohn (KF Faculty, Mentor Classes 14 & 22) talks tips for encouraging Jordanian entrepreneurs
  • Brian Trelstad (Class 12) writes in LSE Business Review on developing a “fiduciary duty” equivalent for impact investing
  • Brad Feld (KF Board) speaks candidly on depression and OCD
  • Andrew Goldner (Class 21) on the risks of moving a startup away from its customers and market
  • Carl Fritjofsson (Class 21) spoke on IPO trends at Silicon Vikings economic forecast meeting
  • On the move: Ben Wirz (Class 19) moving to Bright Eye Ventures in Paris
  • Portfolio happenings: Robert Bosch VC (Cyril Vancura, Class 15) invests in low-power WAN leader Actility
  • Podcasts: Josh Breinlinger (Class 21) on The 20-Minute VC • Brad Feld (KF Board) on Saastr podcast • Ashish Gupta (Class 7) speaks on the state of entrepreneurship in India
  • Job opportunities: (CONTINUING) Kauffman Foundation seeks Director of Entrepreneurial Knowledge Creation and Research

Steve Kaplan (KF Dean) and Correlation Ventures Both Offer New Measures of VC Performance

Chicago Booth School of BusinessSteve Kaplan (KF Dean) provided the research behind the LinkedIn post “VC Performance Is Beating the S&P 500,” which analyzes both VC and PE returns for the period 2003–2013, compared to the S&P 500—and concludes that VC’s performance has been superior to both. Steve’s research uses a new method of measuring fund performance, which he helped develop. Unlike the standard methods of IRR and multiples, the new Kaplan-Schoar Public Market Equivalent (PME) controls for movement in the overall market and is not dependent on the sequence of investment events: “Think of PME as a market-adjusted multiple,” says Steve.

Analyzed with the new method, the data also show that VC performance since 1999 has increased fairly steadily compared to the S&P, and has beaten it consistently since 2007. Similarly, private equity PMEs consistently outperformed VC pre-2007, but since then the trend has reversed. See Steve’s slideshare presentation for the details of his methodology and results.

Correlation VenturesSteve isn’t alone in working on new approaches to understanding venture industry performance. David Coats, Co-founder of Correlation Ventures (where Collin West, Class 17 served his Fellowship), recently posted a Medium essay describing his firm’s U.S. Venture Exit Year Index of realized multiples, which allows meaningful conclusions about performance without waiting for the traditional 7+ years to elapse for comparison. An “exit” is defined as an IPO, an acquisition, or going out of business. Big takeaways from their analysis: rising pre-money valuations over the past several years have led to an overall decline in average multiples, and, as we have seen written from many Kauffman Fellows in the past year, capital efficiency matters. See David’s Medium post for the 2007 to 2016 Index graph.

Alexandre Lazarow (Class 19) Surveys Attitudes for Insurance Technology Sector in Emerging Markets

Omidyar NetworkAlexandre Lazarow (Class 19) is the author of a new report from Omidyar Network, “What Do Emerging Market Consumers Expect From InsureTech?” Alexandre, a Principal at Omidyar, notes that even in the developed world, insurance is a product that must be purchased when consumers don’t need it, giving rise to the adage “insurance is sold, not bought.” In the emerging market, difficulties in creating a customer base are compounded: a large portion of people are underbanked; premiums and payouts are small, which requires a low-cost channel to handle them; insurance in general is not well-understood by the target customer base; it’s hard for insurers to develop large-enough pools of risk; and so on.

Alexandre likens the insurance landscape to the access to credit in these same markets until just a few years ago, when technology developments expanded access to credit and enabled the proliferation of mobile phone payments. In similar fashion, he believes that the insurance landscape is on the cusp of transformation, and it already has a name: InsureTech. Startups are already changing the game in customer acquisition, data and analytics, and product customization. These innovations, note Alexandre, would all make insurance more affordable for the emerging market consumer. But do they even want it?

Omidyar went out and asked that very question, conducting a quick-response survey of attitudes, targeted at Brazil (a middle-income economy), Indonesia and Kenya (lower income), and the United States (highest income). The survey gathered opinions about respondents’ willingness to share personal data—and what types—in exchange for lower rates, the value of highly customizable products, and so on. See Alexandre’s report for the country-by-country splits.

The survey was intended to provide high-level assessment of the potential InsureTech market. Says Alexandre, “We now have an opportunity to dig deeper so we can understand the business models, approaches to product design, and technology that will be most successful in reaching underserved populations.”

Pascal Levensohn (KF Faculty, Mentor Classes 14 & 22) Talks Tips for Encouraging Jordanian Entrepreneurs

Pascal Levensohn (KF Faculty, Mentor Classes 14 & 22) was interviewed on Ro’ya TV in Amman, Jordan about how the next generation of Jordanian entrepreneurs should be encouraged, mentored, and supported.

Fellows who have met Pascal as a KF Faculty member know that he is the founder of Levensohn Venture Partners; since 2012 he has also been advising Dolby Family Ventures on their direct technology investments, and in 2014 became a Managing Director at Dolby. While continuing his role in both organizations, Pascal has transitioned his new technology investing activities over to Dolby Family Ventures.

Dolby is one of the Series A investors in Jordanian startup Mixed Dimensions, which offers cloud-based 3D printing solutions, including their product GamePrint, which allows developers to monetize gameplay moments by offering 3D prints of characters, assets, or other game elements.

The TV interview focuses on Pascal’s evaluation criteria for tech startups in general, and for Mixed Dimension in particular. He believes strongly that startups should compete—from the company’s founding—directly and assertively against rival technologies. His firm gave Mixed Dimensions “very difficult tests of their technology to show that they could out-perform other [existing] approaches, and they did that.”

In discussing mentoring the next generation of entrepreneurs and innovators, Pascal argues, “You don’t have to be a technologist in order to help support young entrepreneurs.” Sharing best practices, and young people learning from those who came before them, can transcend specific technologies.

Brian Trelstad (Class 12) Writes in LSE Business Review on Developing a “Fiduciary Duty” Equivalent for Impact Investing

London School of EconomicsBrian Trelstad (Class 12) wrote “The Challenge for Impact Investing Is Management, Not Measurement,” published on the website of LSE Business Review, the journal of the London School of Economics. Brian is a partner at Bridges Ventures, a firm that strives to create superior returns for both investors and society at large. In the essay, Brian notes that interest in impact investing from LPs currently oustrips activity, leaving many asset owners on the sidelines. While the most obvious reason is the dearth of scaled investment products available, says Brian, “perhaps the most important [reason] is that we still haven’t clearly defined what we mean when we talk about impact.”

Noting that there have been great strides over the last decade in impact investors’ ability to measure the effects of their efforts, Brian says, “I would argue that the challenge is more about impact management”—how LPs (asset owners, as Brian calls them) articulate their impact objectives. Objectives can include “where they want to invest, who they want to reach, what problems they want to solve, [and] what risks they want to take.” It’s then up to fund managers to translate these preferences into real-world investments, as well as for LPs and GPs to have a mutual understanding about what impact information should be reported. Since most funds have more than one LP, the impact sector’s challenge now is finding, across all players, a common language to articulate goals and a framework by which to measure success.

In the for-profit capital markets, there already is a common framework and language: risk and return. Brian reports that a group of industry stakeholders have come together to develop “a common convention for impact management”; the group includes impact funds like Bridges, asset managers like BlackRock and USB, and foundations like Ford and Omidyar, as well as policy-makers. The group is discussing an equivalency to “fiduciary duty” for impact investing; read the full story to learn the group’s plans, and what Brian thinks it might portend for the sector.

Impact Network MapSeparately, this week the Case Foundation (Steve Case, co-founder of AOL, author of The Third Wave: An Entrepreneur’s Vision of the Future) announced that it is currently developing an Impact Investing Network Map, “a data visualization tool to help any investor or entrepreneur access the best, publicly available information on impact investments.” The tool helps users sort through data based on the geographies and sectors that are of interest to them—the potential investor who, as Brian says, might be sitting on the sidelines for lack of knowing where to start. The foundation invites interested parties to sign up now to receive updates, share ideas, and make sure that their information gets on the map. Watch the introductory video.

Brad Feld (KF Board) Speaks Candidly on Depression and OCD

Brad Feld (KF Board) has appeared in two recent webcasts, discussing mental health as an investor and entrepreneur. On “Conquering Depression and Overcoming OCD in Business and Life,” he talked about factors leading to depression in entrepreneurs: being a founder is lonely and intense, and one is likely to experience severe ups and downs not present in most corporate environments. Brad recounts his own experience with depression and obsessive compulsive disorder (an extreme anxiety disorder), and the shame he felt during his first bout of depression—for needing a therapist, needing medication.

As an adult, Brad had the benefit of having been very open about his emotions through his blogging and speaking, so during his second bout of depression he was able to speak and write about his condition. This openness resulted in many other entrepreneurs reaching out to share similar stories, and Brad came to see the “incredible stigma around mental health” in the startup world. He says, “I personally came to the point where I thought it was important to de-stigmatize depression specifically, and the struggles with mental health in the context of leadership.” See his 2015 post, “Bringing Depression Out of The Shadows In Startups.“

Brad also appeared on a Facebook Live session (start at the 9-minute mark) as part of UCLA’s Depression Grand Challenge, having been named the program’s first #DepressionHero. The university’s Grand Challenges are large-scale research projects that “connect hundreds of faculty, students, community members and leading experts across every field to solve society’s toughest problems.”

This week the MIT Technology Review published the article “How Machine Learning May Help Tackle Depression.” Although the technologies mentioned are a ways off from proving clinical effectiveness, the article notes several recent studies that apply machine learning to MRI and fMRI scans to identify differences present in depressed individuals, while still another is using AI to identify the vocal patterns of depressed patients.

Andrew Goldner (Class 21) on the Risks of Moving a Startup Away From Its Customers and Market

Road atlasGrowthX co-founder Andrew Goldner (Class 21) argues in a ForwardBeat profile that customers, not products, create value. This philosophy manifests in two key mandates: always fill a market need, and be closer to your customers than to your VCs. The rise of cheap, accessible tech has eliminated the previous need for startups to be located near a university or government lab, and talent is more mobile than ever. This relative freedom, Andrew argues, has led founders to “build products, technologies, and companies that seem interesting to them” without taking the time to ascertain whether they’re meeting a customer need or desire—and without that foundation, many fail.

Similarly, Andrew sees startup relocation to Silicon Valley (a high-cost area) as a common mistake, as it often removes founders from physical proximity to their customers (and low-cost living). It is vital, he argues in this Entrepreneur video, to make sure a startup is located in the natural hub of its market. As an example, he argues the benefits of Nashville for innovators in the healthtech and medical device arenas: a pool of subject-matter experts and successful entrepreneurs, plus a wealth of early customers.

Carl Fritjofsson (Class 21) Spoke on IPO Trends at Silicon Vikings Economic Forecast Meeting

Silicon VikingsCarl Fritjofsson (Class 21), Principal at Creandum, was a speaker at the first “Silicon Vikings” meeting of the year, “Tech Forecast 360.” Carl discussed the shift he’s seen in IPO behavior: with more companies waiting longer to go public, it takes longer for investors to recoup or multiply their investment. He believes increased competition for talent in Silicon Valley will naturally drive entrepreneurs elsewhere, which poses an opportunity for countries and cities that have “the critical momentum and scale to keep their own entrepreneurs at home and then attract some from other countries” [see previous article; Andrew Goldner, Class 21, thinks the same thing]. Carl highlighted Stockholm as a city that has reached this critical mass, as well as the three entrepreneurial sectors that are hot in Sweden at the moment: AI, autonomous vehicles, and cybersecurity.

Silicon Vikings is a nonprofit that works to connect Silicon Valley with the Nordic and Baltic regions to network and promote technology and business.

On the move:

Ben Wirz (Class 19) has left Knight Foundation, where he was Director of Venture Investments, and is now a Partner with Bright Eye Ventures, a new European fund investing in early-stage edTech, gaming, and media. Bright Eye leads deals in Europe and Israel and co-invests in the US; the firm is particularly interested in tech-driven companies at the intersection of learning and play. Ben is relocating from Miami, Florida to Paris, France as of July 1, and says that he would love to connect with Kauffman Fellows in Europe. Email Ben.

Portfolio happenings:

Robert Bosch Venture Capital (Cyril Vancura, Class 15) joined the recent $75M Series D round for Actility, an industry leader in low-power wide area networks (LPWAN) for IoT. The firm will use its new funding to expand into the target verticals of logistics and supply chain, smart buildings, and energy and utilities. Bosch has an existing portfolio in fields such as connected manufacturing, mobility, connected energy, and smart/connected buildings, and believes there will be “substantial collaboration opportunities between Actility and Bosch in the future.” [Press release]

Podcasts & speakers:

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.

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