Network Updates, 16 Mar. 2017
- March 28-29: Invest Midwest conference. See TENx for discount code & KF cocktail reception RSVP.
- Apr. 2-7: Spring Modules, London, UK. April 4, 6:30pm cocktail reception: RSVP on TENx.
- May 4: Bay Area Women Fellows Breakfast, San Francisco (save the date!)
- Claire England (Class 21) interviewed on CTAN’s diversity recruiting, for both Xconomy and the Austin Business Journal
- VC funding gender gap worsens; but is it all bad? Jen Fonstad (Class 3) among women interviewed by Fortune
- Emergence Capital co-sponsors Google Cloud machine learning competition for startups
- Fadi Ghandour’s (Mentor Class 15) Wamda Group examines the state of Social Entrepreneurs in MENA
- Justin Hall (Class 20) interviewed by DealStreet Asia on the exit landscape in SEA
- Many Kauffman Fellows and Mentors Speak at SXSW
- Special mention: Dilek Dayinlarli (Class 18) hailed as one of Turkey’s top business women
- Portfolio happenings: Invitalia Ventures (Salvo Mizzi, Class 16; Mario Scuderi, Class 21) completes follow-on funding for ZehusBike
- Podcasts & presentations:
- Samir Kaji (Class 20) slideshare on venture debt
- Brian Kissel (Class 7) slideshare on software product management best practices
- SaaStr podcast interviewed Jonathan Lehr (Class 19) on selling to Fortune 500s
- This week’s blog selection: Bill Tobin (Faculty) writes of living a “Retired Lifestyle,” starting now
- Job openings:
NEW: Kapor Capital (4 Summer Associates)
CONTINUING: Innovation Endeavors • Transportation Labs (accelerator) • Matterport • Genomics Medicine Ireland • Invitalia Ventures
Claire England (Class 21) Interviewed on CTAN’s Diversity Recruiting, for Both Xconomy and the Austin Business Journal
Claire England (Class 21), executive director of the Central Texas Angel Network (CTAN), was featured in an Xconomy story on CTAN’s success attracting women and minority investors. Founded in 2006 to facilitate the early-stage investing necessary for a vibrant startup environment, by 2015 CTAN had become the country’s most active single-chapter angel group—and the growth continues, reaching 33% over the last two years.
Claire highlights the even-more-impressive membership growth in the proportion of women in the group (5X) and the number of minorities (2X) over the same time period: “If we have a diversity of entrepreneurs, we should have diversity of investors. All of the different perspectives lend to helping the startups and helping the investors make good decisions.” Recent technological changes, such as the dramatic rise of crowdfunding, have dramatically widened access to investing. As a result, both the number of people investing and the amount of money being invested have risen. More than half of CTAN’s members are now under 50, and they have expanded from traditional angel investing sectors into emerging areas, such as food industry robots. [Read the full story]
The Austin Business Journal also highlighted Claire’s success with diversity at CTAN for its “In the Office” series. The article focused on the measurable financial benefits of gender diversity at the C-suite level, quoting Claire along with women executives from Siemens USA, the Entrepreneurs Foundation of Central Texas, and Whole Foods.[See the following story for a differing perspective on venture capital diversity.]
VC Funding Gender Gap Worsens; But Is It All Bad? Jen Fonstad (Class 3) Among Women Interviewed by Fortune
According to the latest Pitchbook data, the gender gap in female entrepreneur funding is actually getting worse. That was the topic of a recent Fortune article, which examined 2016 data from many perspectives.
- On the “bright” side, women-led startups were involved in 5% of venture deals last year, an improvement from the 3% level it was 10 years ago, but that’s a pretty low growth curve by any standard.
- Looking at venture dollars, women lost ground in 2016, accounting for just over 2% of funding—one of the lowest figures over the last decade.
- Women lost ground on average deal size as well, coming in last year at $4.5 million, compared to $6M and $5M in the previous two years, respectively.
- Male-run startups, on the other hand, experienced an increase in the average deal size, rising steadily from $8.4M in 2014 to $10.9M last year.
Fortune interviewed a number of female investors and founders to respond to the new data, including Jen Fonstad (Class 3), co-founder of Aspect Ventures. A lack of female VCs—and a corresponding lack of female founders’ access to the network of VC—is a starting point for this funding disparity, to which Jen responded, “[The reality] that venture capital is a boys’ club ‘hasn’t changed and I don’t think that will change.’”
On the other hand, interviewees pointed out potential upsides of certain gender differences in investing. Women may get smaller deals because they ask for less money: they ask for just as much as they need. Overall, women “raise based on what they have done in the past, and men raise capital based on what they have the potential to do.” However, this “natural conservatism means women end up owning more of their company and may get to profitability sooner than if they had all the capital in the world.” In a cash-constrained environment, the focus must be on how the business is going to be profitable and sustainable, which forces prioritization and discipline; the fact that men can raise more cash in the early stages of their firms might “lull them into a false sense of security.”
Other women Kauffman Fellows have recently written on this same topic. Our February 23, 2017 Update included an article by Jodi Sherman Jahic (Class 5) on this very topic, in which Jodi argues convincingly for raising “just enough money to achieve key milestones,” because a capital-efficient company can better weather market storms—and because lower fundraising means lower dilution, and more exit options. In a Kauffman Fellows Report, Volume 7 article, Juliana Garaizar (Class 18) found that the ROI of women-led companies is 35% higher than that of their male counterparts, and she makes a compelling case for encouraging women founders and investors. Read Juliana’s full article.[See the previous story for a different perspective on venture capital diversity.]
Emergence Capital Co-Sponsors Google Cloud Machine Learning Competition for Startups
Emergence Capital* announced this week that it has partnered with the VC firm Data Collective to sponsor a novel competition for startups that are using machine learning in their products today. The firm’s medium.com post announcing the event declares, “We believe strongly that machine learning will play a critical role in shaping and improving the way people work,” citing examples of software that provide feedback to sales personnel on the most effective talking points, or to recruiting managers on how to write a job description that will attract the most qualified candidates in the shortest time.
Entrants to the competition must be US corporations and have raised less than $5M in capital thus far, but are not restricted to any specific industry sector (and are not required to be current Google Cloud users). The winning company will receive up to a $1M equity investment from Emergence and Data Collective, along with up to $1M in Google Cloud Platform credits, and 10 G Suite licenses for 1 year. Five other venture firms (Andreesen Horowitz, Greylock, GV, KPCB, and Sequoia) are supporting partners, and will meet and provide feedback to the startup finalists at the competition’s pitch-off event. Competition finalists will all receive 10 G Suite licenses and receive Google Cloud credits of $200–500K. Entries are due April 16. See the competition website for full details.
* Emergence Capital engages the following fellows and mentors: Jason Green (Charter Class, Mentor Class 20), Brian Jacobs (Mentor Class 11), Gordon Ritter (Mentor Class 15), Kevin Spain (Class 11, Mentor Class 18), Santi Subotovsky (Class 15), Joe Floyd (Class 18), and Jake Saper (Class 20). If they add any more, we won’t have room to list them all…
Fadi Ghandour’s (Mentor Class 15) Wamda Group Examines the State of Social Entrepreneurs in MENA
Fadi Ghandour (Mentor Class 15), Chairman of Wamda Group, commissioned a report surveying the state of social entrepreneurship in four MENA countries titled Social Enterprise Development in the Middle East and North Africa. One of the report’s main conclusions: “Social Entrepreneurship (SE) in the Arab world stands on a paradox: It has every reason to thrive and yet every excuse to die.”
Social (impact) entrepreneurship could address a number of needs in the region. The scaling back of public services across MENA has manifested as decaying infrastructure in recent years, creating an opportunity for social entrepreneurship to thrive. However, the report points out several significant roadblocks, with one “glaring weakness in the SE ecosystem” being “the overwhelming attention garnered by plugged-in social entrepreneurs at the expense of those operating in rural and ‘Bottom of the Pyramid’ areas.” Most of the social entrepreneurship action at the moment is at the local level and reliant on individual visionary leaders willing to work with entrepreneurs, which reinforces an uneven ecosystem.
Furthermore, raising capital is a significant problem for these entrepreneurs: the budding SE’s “competition” in the marketplace are highly entrenched government agencies as well as NGOs, which makes it difficult to get support from these two sectors. MENA banks are conservative, and not interested in funding startups with limited business plans or track records. These conservative investment strategies are reinforced by the legal ramifications of defaulting on bank loans in MENA states—which can include jail time—leaving international donors as a primary source of funds. Working with these donors works well in an enterprise’s early stages, but leaves it at the whim of the international organization’s timelines and priorities, and is unsustainable in the long run.
The report maintains, however, that social entrepreneurship may yet be the most practical approach for addressing large-scale regional problems resulting from issues such as climate change and political instability. [Full report] [Summary article]
Justin Hall (Class 20) Interviewed by DealStreet Asia on the Exit Landscape in SEA
Following the recent announcement that Golden Gate Ventures led a $1.4M pre-series A round for Indonesia-based Printerous, Principal Justin Hall (Class 20) was interviewed by DealStreet Asia. Justin has been vocal about the need for a more robust exit landscape in the region: “More M&A, more education, more legwork by founders and investors to show that this is a region ripe for acquisition and roll-ups.”
In Southeast Asia, going public on a regional exchange like the ASX (Australian) or SGX (Singapore) is often considered just another funding step, with Nasdaq or NYSE as the end goal. Even though Singapore is “head and shoulders above [regional] competitors],” Justin says, “you have this genuine fear from both VCs and startups that if they publicly list, the investors simply won’t understand what they’re investing in and that won’t be reflected in the pricing dynamics and valuation.” The solution, he adds, is already in progress as countries work on “educating local investors and preparing their exchanges to accept tech companies to publicly list.”
Justin also points out that ASEAN is not one single market but rather six: Singapore, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines. Each has a distinct market ecosystem, comprised of regulation, culture, and economic contexts, which tends to favor market incumbents coming up and discourages cross-border M&A activity—a major exit vehicle in other locations. [Full story]
Many Kauffman Fellows and Mentors Speak at SXSW
The SXSW Interactive conference that’s wrapping up today featured a host of Kauffman Fellows and Mentors as speakers on a range of topics, including virtual reality, entrepreneur diversity, university spinouts, future health, and LatAm.
- Clint Bybee (Mentor Class 6) – “Transforming Ideas Into Ventures”
- Ramphis Castro (Class 19) – “Se Habla Spanglish: A Bridge for Latino Startups“
- Claire England (Class 21) and Rick Timmins (Mentor Classes 16 & 21) – “UT Austin’s Best Undergrad Startups”
- Ernestine Fu (Class 17) – “The New Mobile Gaming: AR/VR, Messengers, & More”
- Aziz Gilani (Class 14) – “Venture Funding Hits a Lull. Now What?”
- Daniel Kraft (Class 13) – “Impact Pediatric Health”
- Marlon Nichols (Class 18) – “Funding Our Future: Investing in Diverse Startups”
- Ray Rothrock (Mentor Class 4) – “The Rise of Academic Incubators”
- Cameron Teitelman (Class 16) – “Universities and Entrepreneurial Ecosystems”
- Adriana Tortajada (Class 16) – “Beyond Borders: Mexico’s SMART Funds & Innovation” (photo below)
Invitalia Ventures (Salvo Mizzi, Class 16 & Mario Scuderi, Class 21) joined ZehusBike’s recent €1.5M round, adding to the firm’s previous stake in the company. ZehusBike will use its new funds to continue development of its patented hybrid human-electric “e-bikes that do not need to be recharged and that optimize the riders’ efficiency, reducing their fatigue by up to 40%.” [Press release]
Congratulations to Dilek Dayinlarli (Class 18), co-Founder of ScaleX Ventures, who was named as one of Turkey’s top 20 women leaders by Dünya newspaper. Dünya recognized her as Turkey’s first woman VC and Kauffman Fellow. [Article in Turkish]
Podcasts and presentations:
- Samir Kaji (Class 20) offers an educational slide deck, “Venture Debt Financing for Startups,” which provides a solid overview of venture debt, including common terms, types of debt, and benefits/risks. If your interest is piqued by this deck, you may also be interested in the Kauffman Fellows Report article from Volume 4, “Venture Debt: A Capital Idea for Startups” for an even more comprehensive look at this topic.
- Brian Kissel (Class 7) created a slideshare—“Software Product Management 101: Techniquest for Success”—an extensive and detailed summary of product management best practices from a number of thought leaders.
- Jonathan Lehr (Class 19) is featured in a SaaStr podcast, “How to Sell SaaS to Fortune 500s.” In this interview, Jonathan talks about his entrance into enterprise tech investing, describes what the relationship-building process looks like between startups and large companies, and reps NYC as a destination for enterprise tech startups.
This week’s blog selection:
Bill Tobin (Faculty) wrote a medium.com essay, “Working a ‘Retired Lifestyle’,” part of a series of posts on his efforts to define—and then strike—an optimal work–life balance. In this installment, Bill talks about the plan he and his wife came up with in the mid-90s, and how it played out in the years that followed. He ends the essay with a handful of thoughtful questions to invite feedback, and get readers thinking about their own “retirement” goals.
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.
- (NEW) 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 is tomorrow, 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.
- Cyril Vancura (Class 15), a Principal at Robert Bosch Venture Capital, reported on LinkedIn: “We are excited to be partnering with @CometLabs on the first-ever accelerator specifically for startups building AI tools to transform transportation.” Learn more and apply now to the Transportation Lab. New class starts April 3.
- 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. 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. The link to the jobs page from LinkedIn appears to be broken at this time; it’s best to email Salvo directly (firstname.lastname@example.org).
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