Tranquility. 'Ecosystem' #34
A weekly guide on tech news and early stage fundraising. Aiming to open access to the venture industry for less networked founders and junior VCs.
For access to all monthly events, archive or if you would like to support the project, become an annual subscriber⭐ New to ‘Ecosystem’? Find out what it is here.
Hello and welcome back to ‘Ecosystem’, issue #34!
I hope you had a fantastic weekend and thank you for continuing to choose ‘Ecosystem’ as your source of information on tech news and early stage fundraising! Your feedback helps drive ‘Ecosystem’ forward! :)
“I very much enjoy Tzvete’s work with the ‘Ecosystem’ project. The bite-sized newsletter makes it very easy for me to get in sync with the latest news of the tech ecosystem and helps me stay on top of what is worth reading. In addition to curating the best from the ecosystem, though her webinar series she is opening the doors of the VC industry to the brightest tech talent of tomorrow.” - Nikola Yanev, Marketing Manager, Eleven Ventures
If you would like to share your thoughts/feedback, please do reach out :) Raising pre-seed investment, the importance of upskilling yourself and efficient (time) management are few of the themes in the issue. My personal resource recommendation for the week (if you only have time for one thing!) is the latest episode of Naval Ravikant’s podcast on well.. as generic as it sounds, Happiness. It is a must listen!
Stay safe and have a productive week ahead! 👋
“Happiness is a skill you identify and develop that slowly gives you results as you get better at it. It is a process of understanding and self-discovery and there’s no single permanent solution to happiness…Happiness is returning to a state where nothing is missing.” - Naval Ravikant, Co-Founder, AngelList
#EcosystemGiants
Earlier in March was the third #EcosystemGiants session for the year - a real pleasure speaking with Atin Batra (Founder and Solo GP, Twenty Seven Ventures). It was a very insightful conversation covering topics from evaluating investment opportunities at the earliest stages (pre-seed and seed) to what the future holds for ‘Future of Work’ and EdTech. Going back to our chat, few memorable takeaways:
Entrepreneurs, be strategic about how you spend synchronous time with VCs.
“Founders should deliberately send a deck ahead of the scheduled call with a note to the investor saying they look forward to questions when speaking. This forces the VC to be more diligent. Try to make the best out of every half an hour slot you get with an investor - make it a conversation rather than talking through a deck.”
Twenty Seven Ventures is based out of Hong Kong but invests globally. For Atin, who has been conducting DD and investing remotely for the last 5 years, geographic proximity does not matter when assessing new companies. What he has noticed however is a difference in the level of preparation founders from more mature venture ecosystem like The U.S. have compared to European/Asian entrepreneurs.
“American founders already have a data room and projections ready - and it takes less than 24 hours to get these documents. When speaking with founders from Europe/Asia, it normally takes 4-5 days as they don’t have that documentation on hand. You need to be ready for funding - from a business and from a team dynamics perspective.”
In addition to the deck, he would normally ask for two sets of excel documents - financial data for the last twelve months and projections for the next year; plus a similar sheet for user data.
“I don’t look at the numbers but assess the way the business has grown in the past and whether the team can understand and repeat the growth spurt.”
Similarly when reviewing the projections document, it is to understand the assumptions the team is making and future growth strategy.
“VC investing is about de-risking different aspects of business at different stages of a company’s life cycle.”
At pre-seed there are many more different unknowns but the one risk Atin would not compromise on taking is team risk.
“I spend a lot more time on evaluating the team and whether they can execute on the idea they are building than on analyzing any other aspect of the business ”
The two trends he is focusing on in EdTech are community-based learning and seamless education.
“The next generation of students will spend more time in the digital world than in the physical one. We need to build educational opportunities for them.”
In Future of Work, he pointed to three areas of interest:
Coaching/upskilling support for human resources - how to make workers more productive?
Data analytics and ML - how to use data and make better business decisions?
Robotics and automation - how to automate business processes and tasks?
To finish off, Atin stressed the importance of lifelong learning and taking bold bets while young.
“Whatever you are doing, always try to be the best at it. Go out and build a body of work - create something that is of value to this world.”
Supported by community partners:
Startups Magazine, ParlayMe, Kaiku, When Unicorns Fly
Who is the next guest #EcosystemGiants guest? Stay tuned for the next newsletter :)
**In the meantime, going back to investing at the earliest stages and securing that first institutional round of capital - how do you raise pre-seed funding?
Find out from few of the ‘Pre-Seed Investor Giants’ (Deepali Nangia, Venture Partner at Speedinvest and Fred Hagenauer, leading the pre-seed team at the firm; and Elizabeth Davis, VC, Anthemis) on Thursday, 18 March at 6pm CET. Details here.
Innovation Ecosystem Updates
Trending. ‘Everyone and their mother is investing in SPACs.’; yet overall understanding by retail investors remains low (Bloomberg). Is it a surprise then that the SPAC boom has become the Spacpocalypse? (Bloomberg). Roblox’s incredible $45BN IPO in context - why is it significant? (Arts Technica). Who are the people spending millions on NFTs? Meet Beeple’s crypto-rich early collectors (ArtNews). Estonia has become a unicorn factory - how is the country growing this many billion-dollar companies? (CGTN). The story of Hopin - how did 26-year-old Johnny Boufarhat build Europe’s fastest growing startup, now worth $5.65BN? (Business Insider) Apple to invest $1.2BN in an silicon design centre in Munich, Europe’s largest R&D site for mobile wireless semiconductors and software (Reuters). Gender balance in PE? Only ~20% of buyout groups employees in Europe are women (Private Equity News). Looking back to lean forward - how have pandemics in history ended; and how the coronavirus outbreak might come to a close? (FT).
Massive rounds. London's challenger bank Starling becomes UK's latest unicorn, raising $376M(and now valued at $1.9BN); becoming the 10th fintech firm in the country to surpass the $1BN mark (CityAM). Swedish marketplace for ‘background music’ Epidemic Sound secures $450M (PRNewswire). Israeli cloud-native AI platform for planning and operating mass transportation Optibus picks up a $107M series C from leading US investors Bessemer Venture Partners and Insight Partners (Venture Capital Journal). Vertical farming is having a moment - Berlin-based Infarm closes $100m to roll out high-tech indoor farms (Bloomberg) and Oishii, the only vertical farm startup able to produce strawberries raises a $50M series A (The Spoon). Dutch Tesla rival Lightyear raises $48.2M to fuel the first deliveries of its solar EV by 2021-end (Silicon Canals). Kyiv-based edtech platform Preply gets an additional $35M in funding from top European VCs Hoxton Ventures, Point Nine Capital and strategic angel investors Niklas Ostberg (Co-Founder and CEO, Delivery Hero) and Booking.com co-founder Arthur Kosten).
Exits. A busy week in Europe! France-born data solutions firm Talend acquired by private equity firm Thoma Bravo in a $2.4BN deal (NASDAQ). Berlin-based Habyt acquires Quarters and becomes leading co-living player in Europe (Spotfolio). This is Habyt’s third acquisition in the past 12 months, continuing on its buy-and-build strategy to consolidate the continent’s co-living market. An acquisition in the cloud security space - Italian Sumo Logic snaps SOAR provider DFLabs for an undisclosed amount (SeekingAlpha). Global giant Accenture acquires Mannheim/Berlin-based consulting firm fable+ (Tech.EU). Swedish battery maker Northvolt buys US-based battery tech company Cuberg for an undisclosed amount (Tech.EU). Document and file sharing platform Dropbox buys digital document signing platform DocSend for $165M (Techcrunch).
Sustainability. The European climate tech startup list, an initiative by Speedinvest and Creandum (fill in this form to add your startup to the directory). One of Silicon Valley’s most influential investors (and No.3 on Midas List), Chris Sacca on launching Lowercarbon Capital to back startups solving the climate crisis (Forbes). Crypto, NFTs and the ecological damage caused. Is impact investing the new “it” trend in VC? (The London Financial). Making sustainability work for your business (WBJ). Climate-friendly snacks? Julia Collins (Founder and CEO, Planet FWD) on building a startup to positively impact the planet.
Wins for women. The female investors finding tech's next decacorns (companies valued at > $10BN) from Europe (Business Insider). The list 26 powerhouse women including Sonali De Rycker (Accel) and Luciana Lixandru (Sequoia). 👏 Solo GP at WorkLife Ventures, investor-operator Brianne Kimmel is raising a second fund of $60M (12x the amount raised for Fund 1 in 2019). 👏 The European Innovation Council (EIC) launches an impactful Women Leadership Programme for female entrepreneurs. 👏 Apply to be a mentor here.
Soraya Darabi, General Partner and Founder, TMV
Funder
Jon Lai (Partner, A16Z) shares why some of the best apps today are in fact games in disguise
“Be careful not to overpromise and then underdeliver. Founders are tired of investors that claim to add value and then fail to so in the way they conveyed pre-investment or worse – end up being a nuisance. Be realistic about your availability, the time you’ll be able to dedicate to the founders and the nature of your support.”
Miruna Girtu (Venture Partner, SyndicateRoom) shares advice for emerging investors on structuring their value proposition to founders
Founder/ Operator
Hyper-growth without VC funding? Guillaume Moubeche (CEO and co-founder, lemlist) on bootstrapping to $5M in ARR
“You may not be able to convince more than 50% of the people you talk to, and that’s fine. If everyone thinks it’s a good idea, something is probably off as well. But if you can’t convince anyone, that’s a red flag. You’ll need to convince investors, early hires, and customers down the line so selling while you validate is critical.”
How to build conviction at pre-seed? Sarah Leary (Venture Partner, Unusual Ventures), Jyoti Bansal (Co-Founder, Unusual Ventures) stress the importance of capturing initial reactions and selling while you validate
Daniel Ek (Founder, CEO, and Chairman of the board of directors, Spotify) on (non)reversible decisions, attracting/retaining world-class talent and company culture
Twitter Highlight
Gale Wilkinson (Founder and Managing Partner, Vitalize Venture Group)
Startup of the week
Async video updates for remote teams
Supernormal mixes video messaging with AI features to make asynchronous team interactions engaging. The app uses NLP to transcribe content material on-demand and in real time, delivering it as text beside the video. It also makes recommendations for caption summaries - extracting what it considers the top 3 most intriguing sentences from a transcript are.
Tweet @supernormalapp to share they were featured in ‘Ecosystem’!
Do reach out to me if working on a product advancing one or more of the United Nations Sustainable Development Goals. I’m also particularly interested in the Creator Economy - and would love to hear from you if building something in the space.
Startup Go-to Resources
From the things to know before starting a company to marketing and fundraising - THE Field Guide for early stage founders by Unusual Ventures
Cap tables, share structures and valuations - Christian Gabriel (Co-founder and CEO, Capdesk) on managing startup equity
The board meeting guide for SaaS startups
How to prioritize your time by YC Partner Adora Cheung
The must-read guide to syndicates
Want to Become a VC Investor? A 'How to guide' by Earnest Capital
The community playbook cheat sheet by The Community Fund
A curated collection of investment memos and investor essays - gold!
Building a personal monopoly through writing online - an interview with Jack Butcher(Founder, Visualize Value)
Thank you for reading another ‘Ecosystem’ newsletter! What feedback do you have for me (likes/dislikes)? I would greatly appreciate if you share this with contacts (founders, tech operators & investors) who may find the content helpful🖤 Connect with me on Twitter