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- Still working on rebranding, which should be rolled out over the course of the next few weeks.
- A year in review post will be forthcoming this week.
- I’ve launched a paid Slack group exclusively for people looking to work at early-stage start-ups. The goal is to match everyone in the group with a position with equity. If you’re interested in joining at the introductory rate, email me directly by hitting reply.
Recent Startup Funding Announcements 💰
Origin spent six months on its $10m Series A, which it closed in November. The company received one term sheet and has publicly disclosed $12.3m in total financing. The company gets compared to Carbon, Stratasys and Formlabs. Origin is actively looking for a Director of Finance.
Avochato closed its $5m Series A in December, spending a total of three months on the process and meeting with 15 VC firms. The company has raised a total of $6m to date.
SourceDay raised its recent $6.5m Series A round in six months. The company has known the lead investor for the three years and previously invested in the company 18 months ago. To date, SourceDay has raised $10.8m.
Ledgy took six months to close a €1m funding round. The company raised the round at a valuation between 5-10m. Ledgy spoke with around 15 investors and received one term sheet from the lead investor. The company knew the lead investor for 8 months prior to the raise. Total amount of capital raised is 1.3m. Carta is a competitor in the US.
Mediktor started raising its $3.4m Series A round approximately a year ago. The company had roughly 70 conversations with prospective investors and received three term sheets. Mediktor knew the lead investor for 10 months prior to the closing of the round. The company has raised a total of $4.8m to date.
US — California
Origin (Chris Prucha, CEO and founder)
Origin, a San Francisco–based open platform for additive mass production, secured $10m in Series A funding back in November.
Recommended rule to live by: I try to prioritize the three most impactful things I can do to push our company every day and get those things done. It's easy to do mindless work or become too attached to a calendar instead of addressing the big picture items that matter to a company. As a CEO, I believe this is critical.
Recommended book: Hot Seat, by Dan Shapiro. It's by far the most accurate description of being a Founder/CEO in Silicon Valley that I've ever read. All the classic start-up books (the lean start-up, 4-steps to an epiphany, etc) are great, but fail to capture the experience.
Thoughts on work-life balance: Work has always consumed my life since I was at Apple, Notion, and now Origin. It's difficult to "turn off" work now that we're approaching 30 Employees. The best thing I've found for work-life balance is to hire great executives that take ownership; now I have more time to think about high-level strategy. I now avoid working weekends, Founder burn-out is real.
How many firms did you speak with: We started planning to raise a Series-A in late 2017. I went into full fundraising mode in February/March and signed a term sheet after about 6-8 weeks -- making it a 6-month+ process with most of the near "full-time" work occurring at the end. You'll notice that we announced the financing in November instead of immediately after closing for strategic reasons.
What capital will be used for: Hiring, R&D, and mass producing our product in-time for our launch at Rapid + TCT in May.
Comment of valuation after the round: We raised $10MM, so you can probably guess the rough post-money valuation ;-)
Number of investor conversations and terms sheets: We had four Partner meetings and received one term-sheet for our A. I only met with Investors that were referred to me from other Investors or Founders and had a very targeted approach. I signed our Series-A term-sheet before receiving another one (possibly a negotiating mistake, but we felt like Jason Krikorian from DCM was the best fit). People matter a lot to us. Our best Investors drive tangible value to our business, while some other Investors can be add no value (or worse). Semil Shah (Haystack & Lightspeed Venture Partners) and Mike Maples (Floodgate) are some of our earlier Investors that helped me become a better Founder by not being afraid to be very critical.
Seems as though the process of raising money isn’t efficient. Your thoughts: It's not easy, but you can hire a VC to help you raise capital. You may think this is funny, but it has precedent. One notable example is Pinterest: they hired Sarah Tavel from Bessemer (now a GP at Benchmark) to work on product, M&A (Corp Dev), and to pull together some of their growth-stage VC deals. I had first-hand experience as Pinterest nearly acquired my previous company, which later merged with another Founding team that built Notion.
Length of relationship with lead investor: We met Jason and his team in the fall of 2017 -- so over 6-months before we closed.
Total amount raised to date: We've only announced raising a total of $12.3m.
Competitive landscape: Our competitors in 3D-Printing come and go. We're an open ecosystem and have established Partnerships with many companies that would traditionally be competitors. I want to think we are paving a new "grow the entire pie" approach to 3D-Printing instead of the bloodbath our industry has seen in prior years. We even have a friendly dialog with Carbon, Stratasys, Formlabs, and other companies that customers may cross-compare us to.
Macro trends: Additive Manufacturing (3D-Printing) is becoming a mainstream mass production method virtually over night. While companies like Adidas + Carbon were pioneers in this trend, there are many companies in our core market verticals that have similar ambitions and are now beginning to bring these products to market. For example, BMW just quietly produced over 1 million 3D-Printed parts. While 3D-Printing went through a boom and bust cycle in the consumer space (lead by Makerbot), the next generation of vehicles, airplanes, and even mainstream footwear will all have 3D-Printed parts.
Hiring: Open positions. We're really searching for a Director of Finance.
Avochato (Alex De Simone, CEO)
Avochato, a San Francisco, CA-based business communications software company, raised a $5m Series A round last month.
Recommended rule to live by: Perform a time audit on yourself every so often to understand how you are spending your time. That exercise will hopefully guide you on how you could change behaviors to shift time towards higher priority things that matter to you.
Recommended book: “High Growth Handbook” by Elad Gil.
Thoughts on work-life balance: “Designing Your Life” by Bill Burnett and Dave Evans is another great book that covers ways in which you can balance various aspects of your life. Coupled with time audits, you could use their framework at any given point in time to explore what the current status is of your health, career, relationships, and hobbies. If any one of these four areas requires attention, I tend to shift my time accordingly and ask for help as needed.
How long did the round take to close: Avochato’s Series A financing took 3 months from initial pitch to closing.
Number of investor conversations and terms sheets: We met with about 15 venture firms and explored term sheets with several of them.
Seems as though the process of raising money isn’t efficient. Your thoughts: It’s important to have a set process, both on the founder’s side and the investor’s side. Things may not always go according to plan, but I think you can accelerate the time to term sheet if you move quickly with investors and companies that are showing the most interest. If either side is slow to respond, that’s typically not a positive sign. Diligence always takes some time but being prepared in advance with a data room, a legal team, and available references always helps shorten the time frame to closing.
Length of relationship with lead investor: We got to know the Amity Ventures team in August of 2018.
Total amount raised to date: 6 million.
Competitive landscape: With consumer communication trends rapidly evolving toward messaging applications, customers are demanding faster and higher-quality engagement experiences that businesses cannot accommodate solely over phone and email.
Several competitors are helping businesses make this transition, ranging in size from larger incumbents to smaller startups. The challenge is understanding how to do this successfully while keeping the end user at the center of attention. Avochato differentiates itself from the competition by providing an engagement platform that focuses on the customer’s experience.
Macro trends: As software businesses shift from a lifetime license model toward a recurring subscription model, the importance of ensuring customer success has become increasingly relevant. We are seeing organizational structures evolve to include an entirely new department called “Customer Success.” The goal of this department is to ensure customers are succeeding and renewing their contracts in order to increase lifetime values of that customer. Platforms such as Avochato help businesses focus on the customer engagement experience to continue driving revenue and value.
Avochato makes it easy for all business teams to connect with customers and deliver a seamless and efficient messaging experience every step of the way, from lead capture and nurturing to post-sale support. In less than a year, our team of five employees reached seven-figure revenue by using Avochato’s very own platform to acquire hundreds of new customers. We pride ourselves on sharing the insights we’ve learned with our customers to help them succeed.
SourceDay (Tom Kieley, CEO)
SourceDay, an Austin, Texas-based direct spend management automation company, completed a $6.5m in a Series A round last month.
Recommended rule to live by: I set obtainable weekly and monthly goals and have the team do the same. I like to see our team have three visual goals so that peers can understand what that person is working on before potentially distracting them with something less important.
Recommended book: Delivering Happiness by Tony Hsieh.
Thoughts on work-life balance: As a husband and father of three kids, balance is critical but it will come in waves. Some days/weeks will require more focus on finishing a critical project while others can enable you to catch up with family and friends. If you love what you do and the customers you serve, you can be more efficient and make your own balance.
How long did the round take to close: We spent 6 months raising the round, although, in my opinion, you are always fundraising. As a CEO or executive, you are constantly building relationships with potential investors and firms to make sure you build the best partnerships for the company.
Number of investor conversations and terms sheets: We received multiple term sheets and, going to back to the comment that you’re always fundraising, we spoke to multiple potential investors. Although many of those were intended for possible future rounds knowing we were too early for the stage they work in. But this is the process as you’re continually fundraising.
Comment of valuation after the round: While we’re not disclosing our valuation at this time, I can say that we are encouraged by the inbound investment activity and interest. We continue to experience favorable valuation that exceeds industry standards and what is seen in the SaaS space.
Seems as though the process of raising money isn’t efficient. Your thoughts: It wasn’t a full-time effort for me; I was still able to do my normal course of business; building strategic partners, hiring and building the team and managing investors. When you are always fundraising, it doesn’t have to be a full-time job.
Length of relationship with lead investor: We’ve known them and communicated with them for over three years, and they’ve been an investor for 1.5 years.
Total amount raised to date: $10.8 million.
Competitive landscape: The competitors that are out there, such as SAP Ariba, Jaggaer and other ERP-based portals, are considered competitors because of how they position themselves, but we find our biggest competitor is the status quo. We focus on issues related to direct spend, while these other companies were born from and focus on indirect spend which has different business pain points and solves for a different problem. We solve for inefficiencies, challenges and errors that come with manual procurement processes (the status quo) by introducing digitization and automation to procurement, purchase order management and supplier collaboration. This is done with seamless ERP system integration, something we do better than anyone else and with more ERP systems than anyone else.
Macro trends: The number one trend in our space is digital transformation, the digitization of procurement. According to Gartner, by 2025 over 50% of the global midmarket and large enterprise will have deployed procure-to-pay suits via a cloud delivery model.
We fit nicely within this trend. We have a high-demand SaaS product unlike any of the other procure-to-pay solution on the market, and with digitization of procurement only just beginning, we’re positioned well for success.
Ledgy (Ben-Elias Brandt, CEO)
Ledgy, a Zurich-based provider of an equity management platform for private companies, secured €1M in funding last month.
Recommended rule to live by: Doing weekly sprint meetings with goals for this and review of the last week. Setting goals for the next month at the beginning of each month. Always have the long-term goal in mind in these meetings.
Recommended book: Mastering the VC Game (Jeffrey Bussgang): Very good when raising for the first time to understand some of the mechanisms. Also very entertaining.
Thoughts on work-life balance: Yes we’re all in on the company, and yes it’s important to have some balance. We do sports a lot and still have our hobbies and friends.
How long did the round take to close: 6 months.
Comment of valuation after the round: 5-10m.
Number of investor conversations and terms sheets: Around 15, one TS by the lead investor.
Seems as though the process of raising money isn’t efficient. Your thoughts: Some part of it (getting to know each other, finding the right fit) is necessary. However the whole administrative part, of contract signatures, money wiring, notary, etc could be much better. In the future this will all be digitized and much more convenient for everybody. Actually with Ledgy we’re working on this future.
Length of relationship with lead investor: 8 months.
Total amount raised to date: 1.3m.
Competitive landscape: On the one hand there is Excel, which is very engrained in the heads of people for the purpose of equity management, financing round modeling etc. Then there are some US competitors like Carta. Even though the market is competitive, we believe we have a good edge becoming the standard in Europe and beyond
Macro trends: 1) Tokenization of equity holds the promise to digitize transactions and change the investment landscape dramatically. We’re uniquely positioned to offer „classical“ equity management, but at some point, when more mature, become the bridge for these companies to the blockchain world and offer them tokenization as a service. We’re already working on projects in that direction.
2) Developing employee participation in Europe. As can be seen in the recent push by Index Ventures for more favorable regulation for employee participation programs (#NotOptional), Europe is realizing the potential of this for the startup ecosystem. We believe that as culture, regulation and technological solutions improve in the European market, more companies will give more equity to their employees. Ledgy will be the platform to manage these.
Mediktor (Cristian Pascual, co-founder)
Mediktor, a Barcelona, Spain-based symptom checker for pre-diagnosis, triage and decision-making support, raised $3.4m in Series A funding.
Recommended rule to live by: We try to spend the money very efficiently. In Healthcare everything takes more time so you have to take care of the burn-rate.
Recommended book: Sapiens from Yuval Noah Harari. I read it recently and I think it should be read by everyone, it’s an impressive global view of the history of human kind.
Thoughts on work-life balance: We find balance very important and we try to encourage balance to everyone in the company. Many of us do exercise before lunch time. I feel more productive when I do exercise than when I work all day with no break time.
How long did the round take to close: We started one year ago.
Number of investor conversations and terms sheets: More than 70 and 3 term sheets.
Seems as though the process of raising money isn’t efficient. Your thoughts: It takes a lot of time. The market is not structured and its a try-error process. The VCs invest in companies they see evolving for a period of time, so you need to deliver what you promise for a certain time in order to give confidence. At the end, the human connection between the investors and the founders is the key, so is difficult to think of improvements to ease the process.
Length of relationship with lead investor: 10 month before the closing.
Total amount raised to date: $4.8m.