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Which start-up investors actually support the best companies first? Knowing this information before fundraising can help avoid attracting investors who would always tell you that you are "too early" anyway. The problem is that everyone is entitled to success. When you search databases, investor sites, blogs, tweets and newspaper clippings, you don't know exactly who made which call and when.
So our solution is to only ask the founders who really made it possible. Our new product, the theinformationsuperhighway List, will include the investors who have issued the first checks so that every founder can find the help they need when they need it. Here's more from Arman Tabatabai and Danny Crichton:
Over the next few weeks, we will be collecting data that will help individual investors to write the proverbial “first check” in a startup's fundraising session and help catalyze business for startups – be it Seed, Series A, or others Wise (ie, out of your Series A investors, the first person who was willing to issue the check and get the ball rolling with other investors). Once we collect, cleanse, and analyze the data, we publish lists of recommended first check investors across industries, phases of investment, and regions so that founders can see which investors may be best for their business. .
Overall, The theinformationsuperhighway List publishes the most recommended "First Check" writers in 22 different categories, from D2C and e-commerce brands to Space and everything in between. We believe that our 22 categories should cover all or most of today's venture activity based on some data analysis of total investments in each area.
To make this project a success and to create a useful resource for founders, we need your help. We want to hear from company builders and we want to hear directly from them. We will collect foundations submitted by founders using the form linked here.
The valley deal flow continued through the pandemic
Despite many discussions about investors pulling away from startup investments en masse, a new poll by Silicon Law Tech law firm Fenwick & West on activities in the region in April showed that valuations had increased and the markdowns were not as a percentage of the deals have grown. and the general pace of business actually increased. Connie Loizos writes for theinformationsuperhighway that a large part of it can be traced back to later rounds and, of course, generalizes to industries that were driven or hit differently by the pandemic.
Alex Wilhelm then looks at some additional reports for Docsend and NFX's Extra Crunch. They seem to have seen continued growth in investor activity and growing optimism from the founders since April – but the early stage actually seemed more turbulent than you might expect if you had early stage fundraising experience. He separately states that the latest tracking data sources seem to show a decrease in layoffs. By the way, both are part of The Exchange, its new daily column on the latest trends in the startup world for EC subscribers (use the code EXCHANGE to get a 25% discount on a subscription).
Beyond Valley Dealflow (and its Problems)
Juneteenth has been celebrated since 1866 to mark the end of slavery after the American Civil War. But this year, technology companies use it as an official holiday to demonstrate their concern about structural discrimination after the George Floyd murder and subsequent global protests. But what does it really mean? Here is Megan Rose Dickey for theinformationsuperhighway:
The recognition of such a historic day is good. The way these companies publicly announce their plans and look for the press suggests that they need a positive pat on the back. It is perfectly acceptable to do the right thing and receive no recognition for it. It shows humility. It shows that a company is more interested in doing the right thing for its employees than in saving the face.
Instead, tech companies, like Hustle Crew founder Abadesi Osunsade said, have to go beyond one-time promotions and develop habits related to racial justice. Developing habits to hire black people, to promote black employees, to pay black employees fairly, to finance black founders and to make room for black people in management positions will lead to concrete changes in this industry.
Given the ongoing fundraising issues, Delali Dzirasa of Fearless writes about other resources black entrepreneurs can use to get their businesses off the ground, including stock crowdfunding, mentoring programs, 8 (a) programs, SBA- Resources and your local commercial banker.
Online winners and supporters during the pandemic
Two marketers shared new data on which categories win and lose during the extra crunch pandemic this week. Perhaps they revealed where part of the enthusiasm of the founders and investors comes from? Here's Ethan Smith from Graphite, who uses Branch data to provide an overview of how money will be spent online during the pandemic through mid-May:
The good news for vendors overall is that people still shop online but buy different things and in different quantities than before. Child / animal oriented mobile activities and related purchases have skyrocketed. We have also seen an increase in purchases of active clothing, fashion items, shoes and handicrafts as people wait for the lock and prepare for a summer of freedom.
To elaborate on the direct-to-consumer category, here's Ashwin Ramasamy from PipeCandy, who uses a mix of data sources to examine trends in subcategories compared to the year without a pandemic:
Children, cookware and kitchen utensils, clothing, fine jewelry, fashion, women's health, mattresses, furniture and skin care actually deviate negatively from the forecast. This does not mean that these categories have been rejected. We actually say that these categories have not kept pace with the growth trends they orchestrated in 2019. However, the devil is in the details. For example, within furniture there is a category of D2C brands that sell shelves and office furniture. Consumers have invested heavily in it, presumably to enable the Zoom call participants to absorb more of the titles of the books stacked on these shelves than from the calls themselves better than expected. Basically, everything has done well that has helped to numb the reality (alcohol), sweeten the reality (food), distract from the reality (baby care and pets), survive the reality (fitness) or hallucinate an alternative reality (Nutraceuticals). I will leave you with another interesting conclusion that we have come to from further research that is currently underway: the Spotlight category in e-commerce is not aimed directly at consumers – it is medium-sized and large pure e-commerce -Companies. In this segment, the average quarterly growth rate of active companies is above the 2019 average.
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Hello and welcome back to Equity, theinformationsuperhighway's venture capitalized podcast, in which we unpack the numbers behind the headlines.
Your humble equity team is pretty tired but in a good mood as there was a lot to tell this week …
- Epic Games strives to raise a huge stack of cash (Bloomberg, VentureBeat) at a new, higher valuation. We were curious how his lower business can help get a foothold with developers large and small. This part of the chat, taking into account the work of others through the Fortnite parent company, was very convincing for the other main topic of the day:
- Apple against DHH. Hey started this week, and the new email shoot quickly overshadowed the product launch by arguing with Apple about whether there should be a way to sign up for the paid service on iOS, which will lower Apple's sales. DHH and crew do not agree. Apple is under attack due to anti-competitive practices at home and abroad – of varying intensity and from different sources – which makes it all the more spicy.
- Upgrade brings $ 40 million to its credit-oriented neo-bank.
- Degreed raises $ 32 million for its training platform.
- And in the end our view of the current health of the startup market. There have been a number of reports lately on what's going on in the startup country. We gave our opinion.
And that's that. I wish you a nice weekend and some sleep.
Equity decreases every Friday at 6:00 a.m. (local time). Subscribe to us at Apple Podcasts, Overcast, Spotify and all casts.