Tag Archives: entrepreneurship

What every startup founder should know about exits

Benjamin Joffe Contributor Benjamin Joffe is a partner at HAX . More posts by this contributor 70 years of VC innovation 2017 crowdfunding guide The dream of a startup founder can often be summarized by the following well-intentioned, and mostly delusional, quote:  “We’ll raise a few rounds and in a few years we’ll IPO on Nasdaq.” But a more likely scenario looks something like this: You invest a few years of hard work to build something of value. One day you receive an acquisition offer out of the blue. You’re elated. And you’re not prepared. You drop everything to focus on this opportunity. Exclusive due diligence starts. Your company is a mess (IP, contracts, burn). Days become weeks; weeks become months. You’ve neglected business and fundraising. You’re running out of money. M&A is now your one and only option

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Thousands of cryptocurrency projects are already dead

Two sites that are actively cataloging failed crypto projects, Coinopsy and DeadCoins , have found that over a 1,000 projects have failed so far in 2018. The projects range from true abandonware to outright scams, and include BRIG , a scam by two “brothers,” Jack and Jay Brig, and Titanium , a project that ended in an SEC investigation. Obviously any new set of institutions must create their own sets of rules and that is exactly what is happening in the blockchain world. But when faced with the potential for massive token fundraising, bigger problems arise. While everyone expects startups to fail, the sheer amount of cash flooding these projects is a big problem. When a startup has too much fuel too quickly the resulting conflagration ends up consuming both the company and the founders, and there is little help for the investors. These conflagrations happen everywhere and are a global phenomenon. Scam and dead ICOs raised $1 billion in 2017 with 297 questionable startups in the mix. There are dubious organizations dedicated to “repairing” broken ICOs, including CoinJanitor from Cape Town, but the fly-by-night nature of many of these organizations does not bode well for the industry. ICO-funded startups currently use multi-level marketing tactics to build their business. Instead they should take a page from the the Kickstarter and Indiegogo framework. These crowd-funding platforms have made trust an art. By creating collateral that defines the team, the project, the risks and the future of the idea, you can easily build businesses even without much funding. Unfortunately, the lock-ups and pricing scams the current ICO market uses to incite greed rather than rational thinking are hurting the industry more than helping. The bottom line

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Nigerian logistics startup Kobo360 accepted into YC, raises $1.2 million

Jake Bright Contributor Jake Bright is a writer and author in New York City. He is co-author of The Next Africa . More posts by this contributor Breaking down France’s new $76M Africa startup fund Africa Roundup: African startup investments turn to fintech this winter season When Nigerian logistics startup  Kobo360  interviewed for Y-Combinator’s 2018 cohort a question stood out to founder Obi Ozor. “‘What’s holding you back from becoming a Unicorn?’ they asked. My answer was simple: ‘working capital,’” said Ozor. Kobo360 was accepted into YC’s 2018 class and gained some working capital in the form of $1.2M in pre-seed funding round led by  Western Technology Investment  announced this week. Lagos based  Verod Capital Management  also joined to support Kobo360. The startup — with an Uber -like app that connects Nigerian truckers to companies with freight needs — will use the funds to pay drivers online immediately after successful hauls. Kobo360 is also launching the Kobo Wealth Investment Network, or KoboWIN—a crowd-invest, vehicle financing program. Through it Kobo drivers can finance new trucks through citizen investors and pay them back directly (with interest) over a 60 month period. Ozor said Kobo360 created the platform because of limited vehicle finance options for truckers in Nigeria.  “We hope KoboWIN…will inject 20,000…additional trucks on the Kobo platform,” he told TechCrunch. On Kobo360’s utility, “We give drivers the demand and technology to power their businesses,” said Ozor

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Lies, damn lies and crypto analytics

For the past 12 years I’ve followed the rise of the startup — defined as a small business with global ambitions — from my perch at TechCrunch. During that period I watched business reporting change from a sleepy backwater on the back of the Sports section into a juggernaut, a force that controls the global conversation. Why? Because business reporting became war reporting, and the battles fought were between VCs, businesses and ideas that changed the world. In that period, VCs rose from glorified bank tellers to rock stars. Incubators popped up to socialize nervous founders and turn them into capital F Founders and the path for startups became a codified journey from failure to success. Now we’re seeing the same thing happen in ICOs. But something is wrong. The startups coming out of the ICO craze aren’t being judged on the character of their founders, on their technologies or their probability for success. They are being judged, quite simply, on quantitative metrics that interrogate a token with one question: “When Lambo?” This is the wrong approach. Token-based startups must receive the same level of socialization and scrutiny as the old VC-based startup vetting process. But something is different, and it’s an important difference

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Investing in frontier technology is (and isn’t) cleantech all over again

Shahin Farshchi Contributor Shahin Farshchi is a partner at Lux Capital . More posts by this contributor The dos and don’ts of crafting frontier-tech companies Five billion-dollar businesses for the driverless future I entered the world of venture investing a dozen years ago.  Little did I know that I was embarking on a journey to master the art of balancing contradictions: building up experience and pattern recognition to identify outliers, emphasizing what’s possible over what’s actual, generating comfort and consensus around a maverick founder with a non-consensus view, seeking the comfort of proof points in startups that are still very early, and most importantly, knowing that no single lesson learned can ever be applied directly in the future as every future scenario will certainly be different. I was fortunate to start my venture career at a fund specializing in funding “Frontier” technology companies. Real-estate was white hot, banks were practically giving away money, and VCs were hungry to fund hot startups. I quickly found myself in the same room as mainstream software investors looking for what’s coming after search, social, ad-tech, and enterprise software. Cleantech was very compelling: an opportunity to make money while saving our planet.  Unfortunately for most, neither happened: they lost their money and did little to save the planet . Fast forward a decade, after investors scored their wins in online lending, cloud storage, and on-demand, I find myself, again, in the same room with consumer and cloud investors venturing into “Frontier Tech”.  The are dazzled by the founders’ presentations, and proud to have a role in funding turning the seemingly impossible to what’s possible through science. However, what lessons did they take away from the Cleantech cycle? What should Frontier Tech founders and investors be thinking about to avoid the same fate

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Techtonic Group raises $2 million to transform tech hiring through apprenticeships

Where the two companies are using price arbitrage between the costs of developers in emerging markets and coders in the U.S., Techtonic Group is simply offering access to talent. The company’s program pitches itself not just as a development shop, but as a recruitment and training company connecting its clients with skilled entry-level talent. The firm’s clients actually can hire Techtonic Group apprentices at no additional cost after 1,000 hours of work together. The company has fairly typical standards for the skills that its looking for, but it doesn’t require its apprentices to have a degree. Since its inception, more than 30 percent of the participants in the program have been women, half come from underrepresented minority backgrounds, and one quarter are veterans, according to a statement from the company. Given the demands for new programmers across the economy, to most businesses it doesn’t matter where the qualified new employees come from. The company cited estimates that  suggest  as many as 1 million coding positions will go unfilled by 2020. And the industry’s struggle to develop and hire a more diverse workforce has been well documented.  “Tech companies are beginning to recognize the importance of expanding the talent pool to more diverse candidates as both as socially responsible decision and a good business practice,” said Heather Terenzio, Founder and CEO of Techtonic Group, in a statement. “But hiring norms, including degree requirements, can box-out the very talent that employers want and need. Our model offers a new paradigm by enabling our clients to build software with a leading firm while they are building a team based on skills and potential, rather than pedigree.” The Denver-based Techtonic Group was founded in 2006 as a software development shop, but it’s the company’s Department of Labor registered apprenticeship provider for software development that really attracted investors — including University Ventures, an education and training focused investment firm, and Zoma Capital, a venture capital fund affiliated with the multi-billion dollar family office of the Walton family (heirs to the Walmart fortune). The company’s customers include Zayo Group, Well Wallet, Pivotal Software, and Misty Robotics . “In an industry that grapples with both pervasive skills gaps, and a troubling diversity challenge, Techtonic Group is pioneering a uniquely American solution: outsourced apprenticeships,” said Ryan Craig, managing partner of University Ventures, in a statement

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Lessons from cybersecurity exits

Mahendra Ramsinghani Contributor Mahendra Ramsinghani is the founder of Secure Octane , a Silicon Valley-based cybersecurity seed fund. More posts by this contributor Is Symantec getting ready to buy Splunk? Can the security community grow up? To: ceo@cybersecuritystartup.com Subject: Lessons from cybersecurity exits Dear F0und3r: What a month this has been for cybersecurity! One unicorn IPO and two nice acquisitions – Zscaler’s great debut on wall street,  a $300 million acquisition of Evident.io by Palo Alto Networks and a $350 million acquisition of Phantom Cyber by Splunk has gotten all of us excited. Word on the street is that in each of those exits, the founders took home ~30% to 40% of the proceeds. Which is not bad for ~ 4 /5 years of work. They can finally afford to buy two bedroom homes in Silicon Valley. Evident.IO Investment Rounds and Return estimates Date Select Investors Round Size Pre Post Dilution Estimated Returns / Multiple of Invested Capital Sep 2013 True Ventures $1.5m $5.25m $6.75 m 22% 44X Nov 2014 Bain Capital $9.8 m $18.1m $28.0 m 35% 10.7X Apr 2016 Venrock $15.7 m $35.0 m $50.7 m 30% 6X Feb 2017 GV $22.0 m $73.6 m $95.5 23% 3.1X My math is not that good but looks like even some VCs made a decent return. Back of the envelope scribbles indicate that True Ventures scored an estimated ~44X multiple on its seed investment. Others like Bain snagged a ~10X on the A round investment and Venrock which led the Series B round took home ~6X. We see a similar pattern with Phantom Cyber, which got acquired by Splunk for $350 million. A little bird told me that they had booking in the range of $10 million. But before we all get too self-congratulatory, lets ask – why did these companies sell at $300 million to $350 million when everyone in the valley wants to ride a unicorn? Clearly, funds like GV, Bain and Kleiner could have fueled more rounds to make unicorns out of Evident.io and Phantom Cyber.

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Southern California needs to find its hub for it to develop its own tech ecosystem

Recognizing the tens of billions of dollars that the Southern Californian region leaves on the table, because it hasn’t taken its rightful place in the American technology industry, a new group called  the   Alliance for Southern California Innovation  has just released a report to analyze how SoCal can work to assume its pole position. Through interviews with 100 leaders of the technology ecosystem and an analysis of venture capital funding for the region, the organization has concluded (with the help of the Boston Consulting Group) that the promise of a regional rival to Northern California’s silicon valley won’t be fulfilled without the establishment of a geographic hub and a willingness to overcome regional differences. Founded by Steve Poizner  last year to accelerate the growth of a startup entrepreneurial ecosystem in Southern California, The Alliance is building a network of investors, entrepreneurs and universities to provide ballast in the south to the dominance of the Northern California tech industry. The Alliance estimates that Southern California’s tech community could be one-third the size of Silicon Valley’s by supporting or further developing the six pillars it already has for innovation to occur. The potential impact making these changes could have is an added 200,000 new jobs and growth of $100 billion for the whole economic region. “Over the past several years we have observed a significant decrease in startups leaving SoCal,” said Greg Becker, CEO of Silicon Valley Bank . “We’ve also seen a substantial inflow of venture capital from all over the world.” In fact, as is well-reported, the luster of Silicon Valley is fading. As BCG writes in its report: The good news for SoCal and any region with tech ambitions is that the Bay Area has in some ways been  too  successful. Our research revealed a saturation level causing unprecedented challenges, starting with exorbitant housing prices and runaway operating costs that accelerate a startup’s “burn rate”—its monthly spending. Los Angeles investor Mark Suster, a general partner with Upfront Ventures , has been beating the drum for Los Angeles as a new tech hub for a while — and billion dollar exits for Ring and Dollar Shave Club, in addition to the public offering for Snap, lend credence to his position. Suster has also noted for years that the region produces more technology doctorates than any other geography in the United States. Caltech generates more patents than any other university while UCLA boasts more startups founded by its graduate than any other school in the nation. Meanwhile, UCSD in San Diego has a deep bench of biotechnology expertise stemming from its proximity to the Sanford Consortium for Regenerative Medicine, the Salk Institute, and the Scripps Research Institute

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Best Tech and Apps for Your Home Office – Forbes

Forbes Best Tech and Apps for Your Home Office Forbes You also get an audio jack for connecting your own set of speakers or headphones to the monitor (if your computer can pass audio signals over HDMI or DisplayPort), as well as five USB 3.0 ports—including one specialized for quick-charging devices (up ...

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‘MouseJack’ Attacks Hack Wireless Keyboards And Mice From 100 Meters – Forbes

Motherboard 'MouseJack' Attacks Hack Wireless Keyboards And Mice From 100 Meters Forbes Researchers have exploited a range of vulnerabilities in wireless keyboards and mice, taking control of them from up to 100 meters away. The researchers, from Internet of Things security start-up Bastille, focused on a range of dongle-linked devices ... How Criminals Could Hijack Wireless Mice to Hack Computers from Afar Motherboard all 15 news articles »

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Microsoft Monday: Real Cost Of ‘Free’ Windows 10, SwiftKey $250M Acquisition, Office 365 Adds Yammer – Forbes

Forbes Microsoft Monday: Real Cost Of 'Free' Windows 10, SwiftKey $250M Acquisition, Office 365 Adds Yammer Forbes SwiftKey used to generate revenue by selling its app and licensing its technology to Samsung and BlackBerry . “Eight years ... “I was quite fanatical about work; I worked weekends, I didn't really believe in vacations,” said Gates in the interview via ... and more »

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