Data from the Week 📊
Last week, I tracked USD 714.31m in early stage investing, with a median amount invested of USD 4.7m.
Two staggering stats: 1) companies with at least one female co-founder represented 13.2% of the cohort, and 2) female CEOs represented 5.66% of the group.
Highlighted Deals 📌
Last week, Ann Arbor, Michigan-based Pawnguru announced a USD 2.5m Series A round. I got in touch with co-founder and CEO Jonathan Polter.
How long did it take to close the round?
JP: We started this round in May of 2017.
How many investors had the company spoken with during the period of discussions?
JP: Overall we spoke with ~50 or so investors. When we focused on this round, we worked with a much smaller group of ~10 that we had confidence would participate.
Any comment on valuation after the round, in broad strokes?
JP: Double digit valuation.
How will you look to deploy capital from the round?
JP: We doubled the size of our team from 6 to 12 with most of the hires in engineering. 2 hires were also made in sales and marketing.
What’s been the total amount raised to date?
JP: Raised to date has been ~4 million.
Any other details that you care to share?
JP: There’s no question that raising money on the coast is still a whole lot easier then in the midwest. I encourage all non coastal startups to start building relationships with the VC's as early as possible. As difficult as it is to raise capital for any startup, being outside of the coast makes it significantly more challenging. Also, be careful what you read about on TechCrunch and VentureBeat. Fundraising rarely works out that way :)
Apartment Rental Space 🏡
Over the past few weeks, I’ve been speaking with founders and investors in the apartment rental space.
According to AngelList, there are 714 startups in the rental housing space, with an average valuation of USD 4.5m.
Aaron Christopher Cohen, Venture Director of Fueled, spoke to me about his investment in New York City-based Flip.
What attracted Fueled to the apartment rental space generally and Flip specifically?
ACC: We see tremendous potential to disrupt the traditional broker game and found a unique "utility play" in Flip's initial product vision. By focusing on a utility for the sublease market, Flip can make relationships with landlord and tenants that aren't possible with a partner with an explicit focus on replacing brokers. Those relationships will make possible the larger disruptions we hope to see in the future.
What was the total amount invested by Fueled? In broad terms, can you comment on valuation after your last investment in the company, even a broad range?
ACC: FV invested in Flip's seed round and has seen a significant non-realized return after USV invested in the second round.
When investing in early stage companies in the apartment rental space, what are the milestones that you’re looking for?
ACC: When I ran the DreamIt Ventures accelerator, I learned that investing in early stage companies is not so much about the product or the industry but the caliber of the founders. In Flip's case, the founding team is stellar. Susannah is a rockstar that I know would be successful at anything, whether it's running Flip or any other business.
Now that we're into the third year of our relationship, we're actively tracking total listings, rental conversions, and referrals from landlords and tenants.
In general, what trends are you seeing with early stage investing? Are the metrics that you’re looking for higher than they were a few years ago?
ACC: Overall deal flow in early stage companies is way down. We wrote half as many checks in 2017 as we did in 2016. I have only seen one new thing in the mobile space in the last year (the trivia game HQ). The last 10 years have been powered by smartphone and app growth but there is no consensus yet on what the next big platform for innovation is. AR? AI? Blockchain? Who knows?
Greg Beaufait, Partner at Dundee VC, spoke to me about the firm’s investment in Madison, Wisconsin-based ABODO.
What attracted Dundee VC to the apartment rental space generally and ABODO specifically?
GB: Any industry where a bulk of the business is still handled via flyers, word of mouth, cash and check payments, and Craigslist is one that's ripe for a massive shift. With housing being our largest expenditure by far, and more Americans than ever before renting, for longer periods of time, investing in this space was a no-brainer. CEO Alec Slocum and the team at ABODO understand both sides of the market -- what consumers desired first and foremost as well as the needs of property managers, and had incredible market share in Madison, their first market, with an impressive vision for what ABODO would become and where the gaps in the market were. It's a market that went online relatively quickly, but the online experience is still incredibly flawed, as anyone who has searched for apartments knows. Now, they've got millions of renters in many different metro areas, with an apartment search experience that is second to none.
In general, what trends are you seeing with seed and angel investing? Are the metrics that you’re looking for higher than they were a few years ago?
GB: Where we invest, which is exclusively between the East and West coasts, there's a swiftly rising tide of entrepreneurship. Cities across America are embracing entrepreneurship and technology as the driving forces of their future. There are previously untapped pools of talent in this region that either worked at big corporations or went and jumped to a coastal tech hub, and now they're starting companies that are transforming the ecosystem. The exceptional companies and entrepreneurs are here, and capital is following to help them grow, with funds like Steve Case's Rise of the Rest Seed Fund, 4490 Ventures, and Next Coast Ventures, Flyover Capital, and Drive Capital to name a few all new in the last five years. With this new wave of funds, we are starting to see more bigger swings, early, which is only good for the ecosystem.
No Coding Required Job of the Week 😎
Balderton Capital, a UK-based Series A focused Venture Capital firm, is seeking a PR & Community Manager to join their Markerting team in London.
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If you would like a full list of early stage capital raises tracked last week, please email chris[at]pdreporter.com.