No one is going to tell you when your startup has become a product-market fit – no flashing lights, no sirens, no balloons falling from the ceiling.
“Especially for first-time founders, product-marketplace assessment is at a stage where much of its anticipation may be as much art as science,” writes news editor Darrell Etherington, who worked for Nerdshala. Interviewed three VCs about the topic:
- Heather Hartnett, Human Ventures
- David Thacker, Greylock
- Victoria Treasure, Felix
“In the early days and ideas phase, founders lean a little heavily into the macro world and what’s going on in your industry,” Trezor said.
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Thakar said entrepreneurs should be open to mobilizing as much as possible during the concept phase to ensure that they have the freedom to tinker and iterate.
“I have seen some founders – as a VC, this sounds self-serving to me saying this – but I have seen some founders who raise very little capital in their pre-seed rounds or their seed rounds. And they don’t give themselves enough time or enough runway to experiment.”
Like the other Interrupt recaps, there’s a full video of their conversation. We plan to post the rest of the list next week, so watch this space.
Thank you so much for reading Nerdshala+ this week; I hope you are having a relaxing weekend.
Senior Editor, Nerdshala+
Global startup raises $158B in Q3, an all-time record
This year, investors poured a record amount of venture capital into the world’s startups: In the second quarter of 2021, VCs invested $156 billion, up from $158 billion in Q3.
“The numbers are effectively a tie, meaning we’ve gone through two of the strongest periods for investing in private companies in startup history,” write Anna Heim, Ryan Lawler, Mary Ann Azevedo and Alex Wilhelm.
Udemy files to go public due to rising B2B income
Udemy filed to go public this week in the wake of Duolingo’s successful flotation earlier this year, and Alex Wilhelm read of his S-1 that the edtech firm will likely be priced higher than its final private-market valuation.
“Udemy is a somewhat stable consumer edtech offering inside a recurring-revenue B2B product,” he writes.
“If we only value Udemy on its business revenue, on its final private-market valuation, it will be worth 4.5x its Q2 2021 ARR. It is incredibly cheap. And its consumer business has value, too. “
After Proxy Fight victory, it’s time for Box to make some bold moves
The past few years have included delays in IPO filings and a proxy battle with a major shareholder, but these days events are looming well for Box co-founder and CEO Aaron Levy.
Enterprise reporter Ron Miller says this is “a pivotal moment for a cloud content management company,” so he interviewed Levy to learn more about its plans, especially in light of the company’s recent revenue growth.
For balance, Ron also spoke to Deep Analysis founder and principal analyst Alan Pelz-Sharp.
“Next year is important for the box,” he said. “It has to be proved that winning the proxy battle was right. To do so, it will have to grow the Box platform and grow steadily but surely and continue to carve a niche for itself in the market. “
VCs say Latin America has more startup opportunities to pursue
Before putting out the Q3 venture capital numbers, Alex Wilhelm and Anna Heim tried to identify potential gaps in the funding market for Latin American startups, finding that there are more tech companies raising funds in the region than still intrepid investors. There are ample opportunities for
Here’s who he spoke with:
- Nathan Lustig, Managing Partner, Magma
- Julio Vasconcelos, Managing Partner, Atlantico
- Antonia Rojas, Partner, ALLVP
Why emerging technology founders should tackle the toughest problems first
Rebecca Belan interviews Silla Nano founder Jean Berdichevsky about how founders working on emerging technology should think about scaling up, approach funding, and why they should go after the toughest problem first.
“Don’t be afraid to go for the dragon’s teeth, so to speak,” said Berdychevsky, who led the development of the Tesla Roadster’s battery pack.
“Because if you get knocked out, you can get back up and hopefully have the motivation to do it again.”
What Rent The Runway’s IPO Filing Says About Loaner Garments Business
As he looked at a group of Q4 IPO candidates, Alex Wilhelm examined the recently filed S-1 of Rent the Runway, to see what a company that offered gowns on loan had made in that era. How well done is likely where formal wear means more than a pair of sweatpants. A strapless Monique Lhuillier.
He found that the pandemic has been a difficult time for the company. Additionally, “the difference between gross profit and gross profit excluding the cost of depreciation of clothing is huge.”
Stephanie Zahn walks through the rec room pitch deck that won Sequoia’s investment
On a recent episode of Nerdshala Live, Sequoia partner Stephanie Zahn reviewed the earliest pitch decks for social gaming company Rec Room with its founder and CEO, Nick Fajat.
Since Sequoia placed its bet on Rec Room, the company has raised about $150 million.
“I think Nick did an amazing job of setting the tone for the type of social platform Rec Room wanted to be from from the start,” Zhan said.
“What kind of social identities do we want people to have? What kinds of conversations do we want people to be able to have? I think that’s been a big difference for Rec Room from the start.”
Athletic’s numbers really look okay?
After a report of athletic “hemorrhaging” $100 million between 2019 and 2020 prompted a lot of Twitter chatter, Alex Wilhelm studied the subscription sports media site’s publicly available metrics and found a problem. Failed to locate.
“A company doing nine figures of recurring subscription revenue is valuable, even though we believe that Athletic has a much lower gross margin than your average software organization,” he wrote.
Getting the Details in Your Pitch Deck
For the Pitch Deck teardown on Nerdshala Disrupt, managing editor Danny Crichton reviewed two decks, “one consumer and one enterprise,” with three VCs:
- Maren Bannon, Co-Founder and Managing Partner, Jan Ventures
- Vanessa Larco, Partner, NEA
- Ben Ling, Founder and General Partner, Bling Capital
Only the most extraordinary pitch decks will receive more than a few minutes of attention, so Danny selected four slides “that enthralled our panelists to show how VCs can take radically different views on the same material.”
Coinbase CEO Brian Armstrong Might Not Be Enjoying Work, You Guys
Coinbase CEO Brian Armstrong posted a Twitter thread this week, saying the US could be at risk of stifling its future CEO talent because of “the press, politicians and CEOs being trolled (and Congressional testimony) going rounds.” The number of attacks works. Not fun.”
After reviewing Armstrong’s ideas, Alex Wilhelm had some of his own thoughts:
“There are too many things to discuss above. As far as heat is concerned, this is a collection of scorchers.”
Why Techstars is doubling down on Europe
Anna Heim and Alex Wilhelm interview Techstars CEO Maeille Gvet to learn more about why the accelerator is launching a new European program in Paris and in Stockholm.
After noting that Techstars is not yet present in every European national capital, it said that “there is enough room for some. [those] cities will have six, seven, eight, a maximum of 10 events per year,” and “there are many cities in Europe that do” [could] One can easily accommodate 50 to 100 pre-seed investments by Techstars every year.