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Society News Update, 15 Dec. 2016

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New Reports Released—Social Capital on Diversity in VC, Kauffman Foundation on Diversity in Entrepreneurship

Social Capital logoSocial Capital (Mamoon Hamid, Class 11 • Ted Maidenberg, Class 12 • Andy Artz, Class 20 • Brigette Lau, Class 21 • Ashley Carroll, Class 21) released its second annual diversity scorecard—its Future List— ranking 580 senior investors at the 72 most active VC firms in the United States. Firms’ final scores are a combination of age, gender, and ethnicity scores. As reported in TechCrunch, for the most part, the more-diverse firms are also the overall younger and smaller ones, founded in the last decade. The study found that the number of women and the number of non-white senior investors each grew by about 2.5% (“If there’s a silver lining, it’s that the percentage didn’t slip backwards from last year.”).

Kauffman Foundation logoThe Kauffman Foundation also released a report this week, Including People of Color in the Promise of Entrepreneurship. The data-rich report identifies several patterns that place people of color at a disadvantage:

  • More than 2/3 of entrepreneurs use personal savings as a source of funding, and 1/5 use family funds in addition.
  • The median wealth of white households is 20x larger than black households, and 18x larger than Hispanics households.
  • Access to initial capital strongly impacts a startup’s success.

In a follow-up article by the Chicago Tribune, Alicia Robb of the Kauffman Foundation pointed out that the “lack of initial funding” driven by the lack of personal and family wealth “can hinder an entrepreneur’s ability to raise further capital. And it can turn off VCs who want to see that founders have put their own money into the idea they’re pitching.” The Foundation’s report concludes with some entrepreneurs’ quotes, and on this point, one founder said:

I have to show my startup is worth funding through other means and find a way to skip the friends-and-family round and just get to the seed round, which is usually $500,000. That’s a big problem. They have to consider who they are talking to. When you come from a low-income family, generally, you don’t have that connection to people who have money.

Jeff Harbach (Class 16), Karim Elsahy (Class 18), and Beto Pallares (Class 18) Speak at Cairo RiseUp Summit

RiseUp SummitLast week’s RiseUp Summit at the American University in Cairo was a “three-day, one-stop-shop, entrepreneurship marathon” focused on the Middle East and Africa regions. From its grassroots beginnings in 2015, this year’s event drew 4,300+ attendees, including 1,200 entrepreneurs and 125 investors. Several Kauffman Fellows were invited to speak: Jeff Harbach (Class 16) gave a keynote address, “VCs Changing the Globe” (selfie below with angel investor Con O’Donnell on right); Karim Elsahy (Class 18) was in a fireside chat, “Messenger Bots: An Elven Tale”; and Beto Pallares (Class 18) was on a panel, “Medtech: Trends and Challenges” (photo below; Beto in center).

RiseUp Jeff HarbachRiseUp Beto Pallares

As we reported in November, earlier this year Karim founded the online service Elves, “Your personal little helper.” Congratulations are in order, as the Summit partnered with Karim’s firm to handle ticketing for the event as well as add-on services for conference-goers. As described on the RiseUp Facebook page, “Yes, you’ll buy your ticket from an ElfAnd when you’re done, [the Elf] can help you get airline tickets, a hotel room, dinner reservations and a whole lot more.”

Susanne Wilke (Class 7) Takes the Helm of Neurotrope BioScience, Is Featured in BioPharma Dive Article

Neurotrope BioScienceIn September, Susanne Wilke (Class 7) became CEO of Neurotrope BioScience after having served as an advisor and board member to the firm. Based in New York City, Neurotrope is focused on developing drugs to treat neurodegenerative diseases, including Alzheimer’s. In the firm’s press release, Chief Scientific Officer and co-founder Dr. Alkon stated, “Working with Dr. Wilke … I have found her input very insightful. She has applicable and relevant experience integrating scientific understanding with commercial and financial understanding and setting strategic clinical, corporate, and financial goals. Her background and network will be invaluable in helping Neurotrope reach the key milestones necessary to take the company to the next level.”

BioPharma Dive logoSusanne is also featured in a recent BioPharma Dive article, “Women in Biotech: Out on the Front Line,” in which the author talks to several women CEOs in biotech about how they achieved their roles—and how other women can do the same, through perseverance, networking, and mentoring. Susanne succinctly declares the benefits of and challenges to increasing gender diversity at upper levels of management: “Women can also make good managers, and take more of a team approach, integrating all the best perspectives and creating a consensus. Unfortunately, this can be seen as not being strong. Other people are not used to hearing women speak their mind. My advice is stand up for your own beliefs and don’t be deterred.”

Chicago Tribune Interviews John Hamer (Mentor Class 16) about Monsanto Gowth Ventures

Chicago Tribune logoJohn Hamer (Mentor Class 16) is Managing Director of Monsanto Growth Ventures, the corporate VC arm of the multinational agricultural giant Monsanto. He was interviewed at length in a Chicago Tribune article with the provocative title, “What Monsanto’s Venture Capital Group Has in Common with the CIA.” In the interview, John talks about the various ways that Monsanto works with entrepreneurs: partnerships, license agreements, access to Monsanto’s extensive testing facilities and capabilities, and future acquisitions. He also discusses genome editing, how the company sees it as distinct from genetic modification, and where John sees that debate going in the future, in both the United States and in Europe. “Hamer [is] unapologetic about Monsanto’s aggressive pursuit of innovations in digital agriculture, data science and genetic engineering—the kind of technologies that Monsanto executives say are crucial to addressing global food insecurity.”

As for the article’s title, well, John points out that the CIA and farmers are two groups of people that both need to know about remote sensing technology of unpopulated environments. Monsanto Growth Ventures has, in fact, been in conversations with In-Q-Tel, the VC arm of the CIA, “but hasn’t done any deals with it — yet.”

Phil Wickham (Charter Class) Interviews Marlon Nichols (Class 18) about Entrepreneurs’ Common Mistakes

Marlon Nichols (Class 18), of Cross Culture Ventures, talks with Phil Wickham (Charter Class), executive Chairman of Kauffman Fellows, about some common attitudes entrepreneurs bring to the table that may not serve them well. What does Marlon look for most?

A level of humility and being open-minded is something that I cherish in entrepreneurs, and if it’s not there, we’re probably not going to get along too well.

Mala Gaonkar (Class 2) / David Byrne Exhibit Open Now in Menlo Park, California

Pace GalleryIn early October, Mala Gaonkar (Class 2) and singer David Byrne announced their upcoming art-science-technology installation at the Pace Gallery in Menlo Park, “The Institute Presents: NEUROSOCIETY.” Open now through March 31, the exhibit is a “60-minute immersive theater performance where you will be guided through a series of experiences created in collaboration with working neuroscience labs.” With participants’ consent, their reactions and decisions will be analyzed by the 15 participating labs to further the research. “Each visitor thereby becomes a unique and integral part of The Institute’s ongoing research.” [Ticket information]

“Visitors will experience the lab’s work in visceral and entertaining ways…” Read an Engineering & Technology description and review.

Fellows on the Move

Liz Fleming (Class 19) has joined Adara Ventures, a Spain-based VC firm focused on investing in digital technologies. Liz talks about her journey from Spain to Ireland and back again—and her new chapter in venture capital—in a Medium post, “Joining the Adara Ventures Team.” In her essay, Liz expresses her excitement at being able to stay in Spain and be an active investor, and also mentions a few of Spain’s tech startups to watch: LoopUp and AlienVault. You can read about these companies and the whole landscape of venture capital in Spain in Liz’s Kauffman Fellows Report article, “The Future of VC in Spain: Time for a Track Record.”

Read her article, and the entire issue of KFR volume 7 online. If you would like a hard copy, please fill out our hard copy request form, and we will send you one (or more!).

Portfolio Happenings

  • Silicon Valley Business Journal last week named StartX Fund and Suzanne Fletcher (Class 21) the most active AI investors of 2016, and they’re at it again. StartX joined the recent $23M funding round of Augmedix. The firm uses Google Glass to connect doctors and nurses to remote scribes who take notes in real-time as the providers see patients, allowing them to spend more time on patients and less on paperwork. [Silicon Valley Business Journal story]
  • After last week’s sale of plastic-bag maker Novolex to the Carlyle Group, Alex Washington (Class 6) and Wind Point Partners have purchased Paragon Films, whose stretch-plastic films are used principally to wrap loads while in storage and transit. Paragon’s CEO will transition into retirement, and Wind Point has tapped Novolex’s CEO to serve as Paragon’s Chairman. [Press release]
  • Nino Marakovic (Mentor Class 13) and Sapphire Ventures led the recent $25M Series E round for the cloud-based document creation and sharing startup Inkling. Aimed at deskless workers in retail, restaurant, and field service sectors, Inkling replaces paper binders of instructions or static PDFs with interactive, updatable content that provides employers feedback on its use by employees. “Inkling’s customers have shared with us firsthand the transformational impact of the company’s technology on the lives of over a million workers.” Nino will be joining Inkling’s board. [Press release] [VentureBeat story]
  • Frontline Ventures (Will Prendergast, Class 14 • William McQuillan, Class 21 • Shay Garvey, Mentor Class 21) joined latest £5.8 million funding round for Signal Media, offering businesses AI solutions to filter and track changes to their world in real-time, with relevant, trustworthy results. This latest fundraising effort will support the firm’s US sales push in 2017, further product development, and expand staff. [TechCrunch story]

This week’s blog selections:

  • Joe Edgar (Class 19) penned “Navigating the Texas Angel Scene,” an entrepreneur’s perspective on raising angel funding. Joe describes the challenges facing entrepreneurs searching for early-stage, in-state investors as well as the notable features of some of Texas’s networking resources. His advice to entrepreneurs, individual investors, and networks? Let the pitches take a back seat to the basics of building personal connections: “Networks that focus exclusively on pitches seem to have turned the business into a modern-day gladiator event where foreboding angels group together in tearing down entrepreneurs one by one until a victor arises. Angel networks should be more focused on networking with entrepreneurs and less on voting for ‘winners.'” 
  • Ezra Galston (Class 18) wrote this week about venture lending outside the technology centers of Silicon Valley and NYC in “Why the Micro-VC Surge Will Drive Innovation Across the US.” Mirroring Joe’s blog post on the VC side of the table, Ezra examines the availability of local seed-stage capital and whether the surge in micro-VC lending has made a difference in fostering strong ecosystems in smaller markets.

Job Opportunities

  • Trey Hart (Class 20), SVP at 50 South Capital Advisors, reports via Twitter that he’s looking for a Senior Associate, Private Equity for his team in Chicago, IL. This person will focus on the US buyout space, be responsible for due diligence, analyzing historical performance of investments, monitoring and analyzing portfolio performance, and participating in fundraising initiatives. See the Northern Trust website for full details and application information.
  • Will Prendergast (Class 14), Partner at Frontline Ventures in Dublin, Ireland, announced that his firm is hiring a part-time CFO. Job duties include quarterly reporting to investors, investor relations, treasury, regulatory compliance, and advising portfolio companies on best practices. Candidate must have Chartered Accountancy Qualification, 5+ years in the industry, and some knowledge of corporate law. The job is expected to be part-time for 2-3 years, growing to full-time as the firm expands. Read the full job description and application information on LinkedIn.
  • MP Healthcare Venture Management (MPH), the VC group for Mitsubishi Tanabe Pharma Corp, invests in research-driven biotech companies in the US and Europe. They are looking for an Associate to work in their Boston headquarters. The preferred candidate is bright, ambitious, has a strong technical background (PhD or MD), with some exposure to biotech. Prior VC experience is not required. The Associate will be a key member of the team, with a variety of responsibilities that will grow with experience, including identifying and evaluating new investment opportunities and serving as the key contact for multiple portfolio companies. Please send all enquiries to Jeffrey Moore (Class 10), jeffrey_moore@mp-healthcare.com. [Full job description PDF]

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