Why We Announced Public Fundraising

If a tree falls in a forest and no one is around to hear it, does it make a sound?

For over a year, I’ve been asking myself a similar question regarding fundraising for 500 Startups. Prior to the JOBS Act, it wasn’t legal for venture capital and hedge funds to talk publicly about their fundraising activities. Imagine not being able to talk about the *exact* thing you need to talk about. Imagine trying to sell something but not being able to advertise it. Anyone else see a problem here?

Of course, traditional funds have raised capital for years playing by these rules, and up until today 500 has also operated in the same way. However, it’s a more complicated and delicate sales process when you have to establish a “pre-existing relationship” before you can say anything about your fundraising… even if you think you’re talking to “accredited” investors. Now, the new general solicitation rules introduced by the SEC under the JOBS Act have changed the game, and, as of yesterday, 500 Startups is one of the first funds to take advantage of these new rules.

Therefore, I can now tell you we are currently raising our third flagship fund. I can tell you that the fund has a $100 million target. And, I can tell you that, if you’re a U.S. accredited investor and meet our investor requirements, you can invest in our fund. Seems simple, right? But for the last 80 years, I wasn’t able to do that (legally at least).

Before today, our lawyers (and likely the SEC) would have had my head for those comments, but I can now say them without fear given our new SEC filings and verification processes. No longer do we have to say “no comment” when a reporter or member of the public asks if we are fundraising. While that might not sound as sexy as releasing a new 3D-printing product or a video-enabled e-commerce startup, I’m excited by the opportunity.

The work we have to do on our fund is just beginning, but let’s give some credit to government officials for [hopefully] getting this one right. We should also give thanks to folks like Naval Ravikant, Kate Mitchell, the NVCA, and other good folks who worked hard for years to get the JOBS Act passed by Congress.

Lastly, if you’d like some info on our funds — feel free to apply at 500.co/invest.

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500 Startups Announces Public Fundraising

MOUNTAIN VIEW JUNE 26, 2014 – 500 Startups, the most active venture capital fund and  startup accelerator program in the world, is announcing that it has filed with the SEC under the  new rules allowing for general solicitation, and is now publicly fundraising for its third flagship fund, targeted at $100M. To facilitate this process, 500 Startups has partnered with SeedInvest, a leading equity crowdfunding platform, to provide investor verification and related investor
services.

Historically, venture capital funds have been prohibited from talking publicly about raising capital. This restriction has long been problematic for managers seeking to raise awareness about new venture funds. However, with the recent passage of Title II of the JOBS Act, venture capital funds may choose to generally solicit by filing under a new exemption from registration propagated by the SEC. By doing so, venture funds are able to speak publicly about their fundraising activities and potentially tap into a much larger investor base.

In order to facilitate public fundraising for its family of funds, 500 has also partnered with SeedInvest, a leading equity crowdfunding platform. SeedInvest has built an investor verification system and state­of­the­art white label solution which enables venture capital funds to easily manage their own fundraising activity and investor bases.

“500 Startups is already widely recognized by the entrepreneur and investor community as one of the most innovative VC funds in the world. Making this change in our fundraising process allows us to reach a much broader audience of investors than ever before,” said Dave McClure, founding partner of 500 Startups. “We are excited to be working with SeedInvest to streamline our fundraising process and help verify our investors’ accreditation status.” To view 500’s private
white label platform powered by SeedInvest, apply at 500.co/invest.

“500 Startups exemplifies the type of customer we want to work with,” said Ryan Feit, CEO and Co­Founder of SeedInvest. “This is a strong example of our continued devotion to developing deep relationships with leading venture funds, angel groups, and accelerators.”

About 500 Startups 

Founded in 2010, 500 Startups is the world’s most active seed fund and startup accelerator headquartered in Silicon Valley. Founded by PayPal alum Dave McClure, the 500 network includes more than 750 startups, 200 mentors, and 1,000 entrepreneurs all over the globe. 500 Startups takes a unique approach to startup investment and growth that is deeply rooted in community, and reaches hundreds of thousands of startup founders and investors via online media, offline conferences, accelerator programs, worldwide tech conferences, and “Geeks on aPlane” tours. Learn more at500.co 

About SeedInvest

SeedInvest is a leading equity crowdfunding platform that connects investors with high quality startups. SeedInvest provides investors with insider access to highly­vetted startup investment opportunities and makes investing in startups as easy as buying a share of stock. Since launching in 2013, SeedInvest has attracted thousands of investors who are collectively looking to invest over $175 million in startups. For more information or to sign­up for free, please visit
www.seedinvest.com. 

Activate or Die: 3 Keys to User Activation for SaaS (Part 1)

This post is Part 1 in our 500 Distribution series on activation for SaaS, by 500 Distribution Hacker-in-Residence Justin Mares. Get more growth goodness with Distrosnack, our daily email of bite-sized growth + GIF awesomeness.

Imagine you’re living the marketer’s dream.

You’re acquiring hundreds, even thousands of customers every day because your product and marketing are just that awesome. Your team, investors and family are pumped, and there’s a feeling of excitement as your user metrics go up every day.

However, all this means nothing if you ignore one key metric – activation.

Activation is one of the most important metrics for any SaaS company. It’s the second Big A in AARRR, and it’s a measure of the key action your users need to take to get value from your product, and how many users take that action.

This graph shows what happens when you are crushing user acquisition but failing to activate users.

Viddy Daily Unique Visitors Chart

From Andrew Chen’s post, Retention is King.

Viddy, the formerly popular video sharing app, was a viral app that grew rapidly by getting a user to sign up using their Facebook account and then sharing this action with their friends.

However, Viddy never nailed the activation piece. Many of the users that signed up never came back to the app again. Thus, when Facebook put a stop to their friend-blasting user acquisition approach, they went into a tailspin from which they haven’t recovered.

The activation problem only gets bigger when you venture beyond consumer products.

40-60% of users who sign up for a free trial of your software application will use it once and never come back again.

Well, that sucks, but for better or worse, this is normal in SaaS.

In today’s post, we’ll cover 3 keys to user activation for SaaS and a couple of ways you can improve your activation rates right now.

1. Acquisition vs. Activation

Most SaaS companies are (rightly) concerned with user acquisition but fail to pay adequate attention to activation.

What few realize is that activation plays a major role in user acquisition itself.

Imagine that you (and your competitors) can spend $10 on Facebook to get one user signup, and that you make $20 for every customer you have.

Let’s also say that half of your users that sign up for a trial will not activate – they’ll never experience the key action that separates your product from the other SaaS tools out there, and won’t become a fully featured user.

So, overall, you’re breaking even on your marketing spend: $20 x 50% of users that activate equals the $10 you spent on Facebook.

If you can boost this activation number even just to 60%, your marketing channel suddenly becomes profitable, not just break-even.

That increase also opens up new audience and ad targeting options, and allows you to profitably scale your advertising.

Just like you’d optimize your ads, you should be optimizing your activation process to successfully onboard as many users as possible, because activation is part of acquisition.

2. Activation in Steps

Improving your activation rate is an ongoing process that should be done along with other conversion rate optimization (CRO) efforts.

CRO is simply the process of measuring your marketing funnel and running tests to improve the number of people that move between each step. For example, here’s a funnel from Patrick McKenzie’s Bingo Card Creator:

Bingo Card Creator Activation Chart

As you can see, Patrick has broken down his activation funnel into 5 discrete steps, with some small number of users dropping off at each stage in the funnel.

If he were to focus on improving his activation rate, he’d likely run A/B tests to try and get more users customizing lists of bingo cards they’ve created (since that’s the step with the largest dropoff rate).

Activation can be broken into multiple steps, which lets you drill down on precise drop-off points that need the most fine-tuning.

This involves looking at the whole funnel and improving the areas that are performing the worst, in other words, the steps that the most users fail to complete.

In the case of Bingo Card Creator above, you can see that the greatest drop-off occurs when users try to go from creating a list to customizing one. Only 82% of users complete this step, compared to 86%+ across the rest of the business.

For a company like Buffer, these steps might look like the below:

  1. Sign up for a Buffer account
  2. Connect 1 social account
  3. Connect all your social accounts
  4. Schedule your first post through buffer
  5. Check your social analytics dashboard

3. Kill Friction Now

Improving activation is a combination of reducing product friction, building in engagement reminders, and employing triggers based on customer actions.

Here are a few simple ways to reduce friction (remember, test for yourself!):

1. Removing unnecessary form fields

Streamline Form Fields to Maximize Activation

2. Reduce visual friction

Check out the comparison below between Bonobos vs. Lings Cars.

Bonobos uncluttered homepage
Lings Cars cluttered homepage

(To see/hear LingsCars in full effect, you’ll need visit the site).

Here are a few more ways to remove friction:

3. Cut down the number of steps users have to take

For example, importing contacts from Facebook rather than requiring manual entry of friend’s emails would reduce the amount of steps required for a user to reach your key action.

4. Clarify onboarding language

Can you say in half as many words? Onboarding language should be clear and action-oriented, while remaining as concise as possible.

5. Improve site performance

Load time, scrolling and page performance all matter.

In addition to these, you should also run activation experiments of your own. (For some starter ideas, check out this massive Slideshare on activation.)

We’ve just run through a list of how to remove friction. Beyond streamlining, there’s still more you can do to definitively increase your activation rate.

We’ll dig into those in the next post, so stay tuned!

For more growth goodness from the 500 Distribution team subscribe to Distrosnack, our daily bite-sized email of 1 actionable growth tips + 1 awesome GIF.

And, check out these articles you may have missed:

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The Other 1% – Ranking The Top 20 Angel Investors

The following post was contributed by the team at CB Insights.

We analyzed over 2000 angel investors on factors such as network strength, rate of follow-on investment, # of exits, brand and more. Here’s how angel investors stack up. We previously looked at assessing corporate VCs and AngelList syndicates using the same algorithms we use to assess financial or pure-play VCs and today we’re turning our Investor Mosaic algorithms onto individual angel investors. Specifically, we analyzed 2000 individual angel investors and looked at Investor Mosaic factors such as an investor’s stage of entry, past exits, network centrality, and brand, among other things, in order to understand who the top angels really are. The top-ranked angels included well-known names such as Naval Ravikant, Ashton Kutcher, Tim Ferriss, and David Tisch as well as some lesser-known names as you will see below. As always, the data in this brief all comes from CB Insights. The analysis is broken down as follows:

  • Which angels have the best network?
  • Which angels have the highest investment follow-on rate?
  • The Top 20 Rankings
  • What sectors & industries are the top angels focused on?
  • Where are top angel investors investing – geographically?

Read more

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Micro VC Rising: Analyzing Trends and the Top Investors in the Micro VC Ecosystem

Micro VC funding participation in VC deals hit a multi-year high in Q1 2014. Of course, they are not all created equal. Here’s who is doing the most deals, has the strongest networks and best follow-on rates. Venture capital funding is on a tear so far in 2014 – hitting a U.S. quarterly high in Q1 of this year that has not been seen since Q3 2000. And it’s not just high-profile, well-established venture firms wheeling and dealing.

Over the past several years, one of the most significant trends in venture has been the rise of smaller, micro VCs. And they’re being spawned at a rapid rate with almost half of the VC funds raised in the last 6 months being those with < $50M AUM. Of course, there are some elder statesmen in the micro VC game and some of them have already notched some impressive exits. The AUM level that defines a micro-VC is open for debate with some drawing the line at $75 or even a $100 million. In addition with some firms having raised multiple funds, there are micro VCs that, in aggregate, have more than the threshholds one might set. AUM levels aside, micro VCs are focused on the earliest stage opportunities generally investing first at the Seed stage. This analysis puts the rise of micro VCs in context – breaking down both macro-level funding trends and firm-level insights. The full list of micro VCs used in this analysis are listed at the bottom of this brief. The report is broken down into sections as below:

  • Early-stage financing trends among micro VCs
  • Micro VC deal size trends
  • The sub-industries micro VCs invest in most
  • The most active micro VCs
  • Analyzing the follow-on rates of micro VCs
  • Which micro VCs have the strongest network?

Early-stage financing trends among micro VCs

With more micro VCs investing, early-stage deal and dollars involving micro VC firms in Q1 2014 hit $627M across 242 deals globally. Of note, early-stage funding participation by micro VCs has expanded markedly from just a couple years ago. Compared to Q1 2011, micro VC early-stage funding increased 77% while deal activity grew 64%. earlystagemicro

Micro VC deal sizes tick up

Interestingly, the average and median early-stage deal sizes with participation from micro VCs have risen since 2011 (in line with the uptick in seed VC deal sizes overall). In Q1 2014, average early-stage micro VC deal size hit its highest level in three years, bumping up to $3.4M. Median micro VC deal sizes have trended above $1.5M in each of the last three quarters.

microdealsizeAd, sales & marketing tech and BI & analytics are hottest among micro VCs

At the sector level, Internet and mobile dominate micro VC investments – capturing 85% of unique company investments by micro VCs since 2011. And within the Internet sector, Advertising, Sales & Marketing tech and Business Intelligence, Analytics & Performance Mgmt saw the highest percentage of deals among sub-industries. eCommerce marketplaces and apparel & accessories firms also ranked highly, with ed tech rounding out the top 5 most popular markets for micro VC investments over the period. The focus on capital efficient technology sectors makes sense for Micro-VCs given the plummeting cost of technology infrastructure and the ability for startups to prove out a business concept with modest amounts of funding (aka traction). It, of course, doesn’t translate as well to more capital intensive areas such as life sciences (pharma, biotech) and clean tech (renewable energy, batteries, etc). Of note, while enterprise-facing sub-industries were the top places for internet bets by micro VCs, Gaming and Social ranked highest among micro VC investments into the mobile sector. The top 10 sub-industries by unique company investment for the Internet and mobile sectors are highlighted in the chart below. subindustriesmicro

The most active micro VCs – 500 Startups, SV Angel lead

Which firms are the most active investors in the micro VC landscape? Since the start of 2011, 500 Startups tops the list of most active micro VCs by unique company deals – followed by SV Angel. Interestingly, two New York-based investors – Lerer Ventures and Founder Collecitve – ranked third and fourth on the list, respectively. The chart below shows the 20 most active micro VC investors by unique company deals between Q1’11 and Q1’14 (multiple investments into the same company count as a single investment). Other top 10-ranked funds by activity include Aydin Senkut’s Felicis Ventures, Mike Maples Jr.’s Floodgate Fund and Michael Arrington’s CrunchFund.

mostactivemicroAnalyzing the follow-on rates of micro VCs

Of the most active micro VCs in the period, ff Venture Capital tops the list of investors by follow-on rate of first investments. Baseline Ventures and Floodgate Fund ranked just behind with Felicis Ventures and Founder Collective rounding out the top 5. It’s worth mentioning that the discrepancy between the 1st and 10th micro VC by follow-on rate was <10% – as all 10 of the firms have shepherded their investments to follow-on capital quite well (over 70%). Note: the ranking does not take into account micro VC investments made in the last 13 months as those were not mature enough to be included in these calculations. The 13 month figure comes from the Series A Crunch report. followonmicro

Which micro VCs have the strongest network?

Can micro VC go the distance? Yes, but not by itself. It needs larger partners to help support growth further along the investment life cycle. It doesn’t need to be a we/they relationship between Micro VCs and larger VCs. It can, and should, be a collaborative and mutually beneficial relationship that ultimately inures to the benefit of the entrepreneur and the company.

The above quote comes from a post by Roger Ehrenberg of IA Ventures. And while his point rings true, it speaks to a broader point in venture capital which academics have shown – stronger networks drive better VC returns. In the case of micro VCs, this means those with stronger networks to high-quality VCs (both large and small) give them a leg up by virtue of access to stronger dealflow and information, syndicate partners and, perhaps most importantly for micro VCs, follow-on investors. So using CB Insights Investor Mosaic algorithms, we calculated a ‘network centrality’ score to identify the top decile micro VCs (out of 135) that have the strongest investment networks. And based on the data, SV Angel ranks highest, followed by Lerer Ventures, 500 Startups, CrunchFund and Founder Collective. It should be noted that all of the firms listed below are ranked in the top decile of firms and so the differences between their network centrality scores are relatively small. The table below highlights the top 14 micro VCs (top decile) by network centrality and their top 3 VC co-investors by total companies.

networkmicro

The following 135micro VCs were used in this analysis. By definition, micro VCs in this analysis generally met the following three criteria: 1) fund size ≤$100M 2) 80%+ of investments were at the early-stage (seed/Series A) and 3) 10 or more investments since 2011.

212 Capital Partners
500 Startups
Accelerator Ventures
Advancit Capital
A-Grade
AIB Seed Capital Fund
Amplify Partners
Arcus Ventures
Baroda Ventures
Base Ventures
Baseline Ventures
Bee Partners
Blume Ventures
BOLDstart Ventures
Boston Seed Capital
Bullpen Capital
Caixa Capital Risc
Chicago Ventures
CincyTech
Collaborative Fund
CommonAngels
Connect Ventures
Contour Venture Partners
Costanoa Venture Capital
Cowboy Ventures
CrossCut Ventures
CrunchFund
Cue Ball Capital
Cultivation Capital
Dace Ventures
Data Point Capital
Deep Fork Capital
Detroit Venture Partners
Dorm Room Fund
Double M Partners
Draper Associates
Dundee Venture Capital
Earlybird Venture Capital
Elaia Partners
ENIAC Ventures
Expansion VC
Felicis Ventures
Fenox Venture Capital
ff Venture Capital
FireStarter Fund
First Step Fund
Floodgate
Flywheel Ventures
Forerunner Ventures
Fortify.vc
Founder Collective
Founders Co-op
Freestyle Capital
Golden Gate Ventures
Golden Venture Partners
Great Oaks Venture Capital
Harrison Metal
High Line Venture Partners
High Peaks Venture Partners
Hyde Park Venture Partners
IA Ventures
IllinoisVENTURES
Illuminate Ventures
Initial Capital
Initialized Capital
Inventus Capital Partners
Inveready
K9 Ventures
Kae Capital
Kapor Capital
Kaszek Ventures
Kepha Partners
Kibo Ventures
LaunchCapital
Learn Capital
Lerer Ventures
Lifeline Ventures
Lool Ventures
Lowercase Capital
Ludlow Ventures
MentorTech Ventures
Merus Capital
MESA+
Metamorphic Ventures
MHS Capital
Midven
Morado Venture Partners
Moscow Seed Fund
Mucker Capital
Neu Venture Capital
NewSchools Venture Fund
NextView Ventures
OCA Ventures
Okapi Venture Capital
O’Reilly AlphaTech Ventures
Passion Capital
PivotNorth Capital
Plug and Play Ventures
Point Judith Capital
Point Nine Capital
PROfounders Capital
Promus Ventures
Quest Venture Partners
Raptor Ventures
Real Ventures
Red Dot Ventures
Red Swan Ventures
Resolute.vc
Rincon Venture Partners
Romulus Capital
Rothenberg Ventures
S3 Ventures
Sarsia Seed
Scout Ventures
SEED Capital
Sherpa Ventures
Siemer Ventures
Signia Venture Partners
Silverton Partners
SK Ventures
Social Leverage
SoftTech VC
SOSventures
Subtraction Capital
SV Angel
TEEC Angel Fund
Tribeca Venture Partners
Tugboat Ventures
Unitus Seed Fund
Valar Ventures
Vast Ventures
VegasTech Fund
Venture51
Version One Ventures
XG Ventures

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PreMoney Inside Look: Corporate Venture Capital is Hot Again

The following post was contributed by CB Insights.

Corporate venture capital is hot again. U.S. funding levels spiked in Q1 2014 to nearly $3 billion. Public tech companies are sitting on massive cash balance sheets and their venture groups are involved in some of the largest VC financings happening today (Cloudera’s $900M Series F rounds saw Intel Capital lead and Google Ventures participating). But as more corporate VCs jump into the tech investment landscape, the reality is that not all of them are created equal. So we wanted to evaluate corporate VCs using the same algorithms (Investor Mosaic) and metrics we use to assess traditional or pure-play venture capital firms to see how they stack up. This analysis specifically breaks down the tech corporate venture ecosystem and covers both macro and firm-level insights. The full list of corporate VCs evaluated are listed at the bottom of this brief. Specifically, it is broken down as follows:

  • Financing trends among corporate VCs
  • The most active corporate venture groups
  • Who’s most active at the early-stage?
  • Analyzing the top CVC-backed exits – and when they got in
  • Which corporate VCs have the strongest network?

 

Financing trends among technology corporate VCs

Q1 2014 saw tech corporate venture capital investors participate in 157 deals globally totaling $2.98 billion. With more CVCs getting active and several huge CVC-syndicated late-stage deals, funding participation in Q1 2014 by tech corporate venture investors increased 174% compared to the same quarter last year and a whopping 300% compared to Q1 2011. cvc500

The most active corporate venture groups – Intel Capital leads

In corporate venture, a handful of investors are notably more active than the rest. Topping the list of most active corporate venture arms since the start of 2011 was Intel Capital, which invested in over 230 unique companies over the period. Not far behind were Google Ventures and Qualcomm Ventures – which have both invested in over twice (4x in the case of Google Ventures) as many companies as the next most active investor, Salesforce. The chart below shows the 20 most active corporate venture capital investors by unique company between Q1’11 and Q1’14, highlighting just how much more active the top 3 are versus others. cvc5002

Who is most active at the early stage? Google Ventures

Peeling back the data, Google Ventures by far ranks as the most active early-stage CVC – investing in over 150 companies at the early-stage. 65% of Google Ventures’ early-stage investments have come at the seed-stage – putting the CVC among the most active seed investors across the entire venture capital ecosystem (corporate and pure-play). cvc5003

Analyzing the top CVC-backed exits – and when they got in

There are 8 corporate venture capital arms that have registered 10+ exits since the start of 2008. Intel Capital has by far notched the highest amount of exits, with more than twice as many as second-place Google Ventures (which began operations in 2009). The visualization below highlights the 5 largest exits by valuation at the time of exit by each of the 8 CVCs over the period. By sheer size of exit, Google Ventures stands out with five exits already at or near $1B including HomeAway, Meraki and The Climate Corporation. Interestingly, Salesforce -which did not make the ranking – has quietly built a large pre-IPO portfolio of private company investments and so looks poised to have some sizable exits. Also of note, while the largest recent exits of 12 top VCs including Greylock, Sequoia, Accel and Benchmark primarily concentrate among consumer tech, enterprise tech finds itself prominently among the largest CVC exits over the period including Fusion IO and Ruckus Wireless. cvc5004 Of course, the biggest gains in venture accrue to investors who got in earliest (and who maintain ownership over time). Peeling back the list of exits among these CVCs, it’s apparent that the corporate venture firms as a whole tend to first invest in their largest exits at the mid-stage. cvc5005 Which corporate venture arms have the strongest network? In venture capital, networks are a critical driver of VC performance. The quality of a VC’s network helps them get access to better dealflow and deal information, find syndicate partners, and help their companies find follow-on investment or exit opportunities. A VC’s network is often highlighted as part of their value-add when talking to entrepreneurs, but of course, not everyone’s network is the same. So we used CB Insights Investor Mosaic to calculate a ‘network centrality’ score to identify the 10 tech corporate venture investors (out of 61) that have the best, strongest investment networks. Based on the data, Google Ventures ranks highest. Five other CVCs ranked in the top decile including Qualcomm Ventures, Comcast Ventures, Salesforce and Time Warner Investments. Based on Google Ventures’ investment syndicate, Kleiner Perkins Caufield & Byers and Andreessen Horowitz appear at the top of the list. Andreessen Horowitz has syndicated the most deals with GV at the early-stage while Kleiner and GV have teamed up on financings across the maturity spectrum from Angellist to Shape Security to Secret. The table below highlights the top 10 most networked CVCs and their top 3 co-investors by total deals. networkedcvcs

List of all tech corporate VCs in this analysis

The following 61 corporate VCs were used in this analysis. Tech corporate VCs were defined as those who met two criteria:

  • Over 80% of their investments were into tech categories, i.e., internet, mobile, software, hardware/electronics)
  • Made over 5 unique tech company investments in the last 2 years
  • Must be a separately identifiable corporate venture unit, i.e. corporations investing periodically in private companies but with no delineated corporate VC unit are not included
  1. AMD Ventures
  2. American Express
  3. American Express Ventures
  4. AOL Ventures
  5. Bertelsmann Asia Investments
  6. Bertelsmann Digital Media Investments
  7. Blackberry Partners Fund
  8. Bloomberg Beta
  9. BMW i Ventures
  10. Citi Ventures
  11. Comcast Ventures
  12. CyberAgent Ventures
  13. Dell Ventures
  14. DG Incubation
  15. Docomo Capital
  16. GE Ventures
  17. Google Ventures
  18. GREE Ventures
  19. Hearst Ventures
  20. Innovacom
  21. In-Q-Tel
  22. Intel Capital
  23. ITOCHU Technology Ventures
  24. Kaplan Ventures
  25. kbs+ Ventures
  26. KDDI (Mugen Labo & Open Innovation Fund)
  27. Liberty Global Ventures
  28. Microsoft Ventures
  29. Mobile Internet Capital
  30. Motorola Mobility Ventures
  31. Motorola Solutions Venture Capital
  32. Nissay Capital
  33. Nokia Growth Partners
  34. NTT DoCoMo Ventures
  35. Orange-Publicis Venture Fund
  36. Point B Capital
  37. Qualcomm Ventures
  38. Reaktor POLTE
  39. Recruit Strategic Partners
  40. Reed Elsevier Ventures
  41. Salesforce
  42. Samsung Ventures
  43. SanDisk Ventures
  44. SanomaVentures
  45. SAP Ventures
  46. Siemens Venture Capital
  47. SingTel Innov8
  48. SK Telecom Ventures
  49. Softline Venture Partners
  50. Steamboat Ventures
  51. Swisscom Ventures
  52. Tekes
  53. Telefonica Ventures
  54. Telstra Ventures
  55. TELUS Ventures
  56. Tengelmann Ventures
  57. Time Warner Investments
  58. T-Venture
  59. UMC Capital
  60. Verizon Ventures
  61. Vodafone Ventures

 

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PreMoney Primer: MDV’s Katherine Barr On VC & the LP POV

The following post was contributed by Katherine Barr, General Partner at Mohr Davidow Ventures.

I moderated a Limited Partner (LP) panel at last year’s PreMoney event similar to the one that I will be moderating again this year.  When asked about the attractiveness of venture as an asset class last year, one of the panelists presciently said, “We’re at a cycle point in venture again.  The investment opportunity is great and the overall Limited Partner psychology is weak.  It’s a great, uncrowded market.”  A year later, it’s not such an uncrowded market anymore.  58 U.S. venture capital firms raised $8.9 billion in new commitments during the first quarter of 2014, the strongest fundraising quarter since 2007.  And 10-year venture capital returns hit 9.7% as of the end of 2013, beating out several public-market benchmarks, according to the latest Cambridge Associates data.

It struck me over the past year that, even though LPs aren’t directly involved in company building on a daily basis like we, the fund managers, are, there are still a lot of similarities between their job and ours as they drive to generate value for their investors, universities, beneficiaries, pensioners, and multigenerational wealthy families.

One of the panelists from last year’s PreMoney “LP POV” panel emphasized the importance of investing in individual or a team of fund managers they strongly believe will provide great returns: “We’re in the business of judging people who judge people.”  We, as venture investors, look to invest in companies with strong tailwinds behind them and that pursue large market opportunities, but first and foremost, we invest in the entrepreneur who is going to build each company.  We need to be able to look her or him in the eye and make a judgment call that he or she will be a great partner to work with and be able to build a company that generates a great return for our LPs.

Venture investors hold (or at least should hold) our entrepreneurs accountable, expect that they will be transparent with us, and utilize the money that we invest wisely.  Similarly, a LP panelist from last year said that a key question he asks when doing diligence on fund managers is, “Has the VC done what they said they would, and have they owned up to what hasn’t worked?  We value integrity.”

There are both early risk takers and those who are more risk averse among venture investors, similar to the Limited Partner community.  One of our panelists from last year commented, “The LP community is very herd-like, but there are leaders willing to make independent decisions.”  Direct investing in select portfolio companies through the venture firms in which LPs have invested is on the rise among many segments of the LP community, with funds of funds particularly active.  Many of the funds of funds who took a thought leadership position, did their diligence and built a relationship of trust with the venture managers they invested in have done particularly well when they have been early movers thus getting proprietary access to strong direct investment opportunities among their venture portfolio.

Just as the landscape has been shifting among venture investors with varying sizes and stages of funds, there have been changes among the LP community as well, with public pensions embracing venture in a larger way as a group, generally.  States including Georgia, Oregon, and Ohio have created programs to incentivize venture investing in-state as an economic stimulus.  And, due to the varying sizes of venture funds these days, some large public pensions are creating programs for emerging managers to deploy capital in smaller amounts than their traditional large bite-size.

Generational transitions have been fairly common among venture firms over the past number of years.  One LP panelist from last year said that in some cases, firms should run their course and just not have a generational transition.  However, he advised, if you don’t intend to close shop when the current general partners retire, then make sure you have a good mentorship and transitional system in place in order to not disrupt fund returns: “Promote young people early and keep the bar high.  Keep the average age of the investment team steady.”

Overall, LPs are stressing accountability, transparency, and partnership more than ever before with the number of LP advisory councils for venture funds on the rise and strong scrutiny of venture fund track records.  With a new generation of investors building their reputations, a variety of venture fund stages and sizes to fit various startup company and LP needs, and a new wave of innovation upon us, it is a good time to be part of the venture industry.

Want more PreMoney insights? Check out  PreMoney.co to view this year’s complete speaker lineup + agenda. Be sure to reserve your seat before tickets sell out. 

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Sales Best Practices that Separate Heroes from Zeros

The following post was contributed by Mo Yehia. 

Companies that sell software to businesses (SMBs) have it all wrong.

  • Marketers focus on the top of the funnel and don’t personalize outreach. e.g. Vistaprint, which offers a slew of technologies including a Facebook page builder, often doesn’t know which of its inbound prospects have Facebook pages.

  • Salespeople focus on the bottom of the funnel and painstakingly research SMBs using disparate sources (e.g. website, Facebook, cold calls). e.g. Some BBB reps spend up to 90% of their time researching prospects to turn a cold call into a warm one.

Marketers who don’t personalize outreach waste money, and salespeople who manually research prospects waste time which ultimately decreases company profits. Despite these inefficiencies, knowing that SMBs continue to adopt technology and purchase more digital products (most haven’t), software companies are hiring armies of salespeople and increasing marketing budgets to capitalize on this. So, what’s the solution?

Inspired by Aaron Ross’ Predictable Revenue, these sales best practices can help companies close more sales in less time. Aaron’s framework helped Salesforce.com, one of the most successful startups ever, increase recurring revenues by $100 million. Without further adieu…

Specialize to increase productivity. It’s hard to switch between mindsets.

As a general rule, when people spend 20%+ of their time on a secondary function – e.g. sales development folks handling large (hundreds/month) incoming lead volume – break  out that function into a new role…

Inbound Qualification/Market Response (“qualifiers”)
Focus 100% on qualifying incoming leads.

Outbound Prospecting/Sales Development (“initiators”)
Focus 100% on outbound prospecting.

Account Executive/Sales (“closers”)
Focus 100% on closing deals from their live pipeline.

Account Management/Customer Success (“frictionless karma”)
Focus 100% on making customers successful and happy.

The best source of predictable revenue is predictable lead-generation.

Duh. This statement seems obvious, but it’s easily forgotten. Lead-generation (outbound prospecting/sales development) is the lifeblood of any sales-heavy company trying to reduce revenue volatility/surprises. Set up funnels early, collect data, define performance (conversions, abandonment, etc), test variations (across channels, reps, etc), improve processes, and stay focused on big picture goals.

Limit yourself to only a few kinds of “ideal customers.”

You can have more than one ideal customer, but limit yourself to no more than five profiles. If you need more than five profiles, your marketing strategy needs focus. Once you have a dozen unaffiliated (not friends, investors, etc), paying customers, identify what they have in common (vertical, title of purchaser, revenue, etc), create a hypothesis on your value add, and talk to customers to validate it. Finally, sketch out your ideal customer profile and determine how to reach this market at scale.

You can send “unsolicited” emails to businesses, so long as…

The subject and header are not misleading.

You have a physical address in your email.

You include a way to opt-out from future communications.

Voicemail can be effective in combination with email.

When a prospect hears your voice, it helps them establish credibility that you’re a real human. Don’t get too mechanical with scripts and lose the personality in your voice. Similar to sending an email, keep voicemails brief, establish a point of reference, and state your name and number. Do not ask questions, reference failed attempts, or sell.

Mo Yehia is Crossing Guard at Sidewalk, a tool that helps marketers and salespeople close more sales to SMBs through targeting and automation. He’s lesser known for stints at Sparkle Buggy Car Wash and Lehman Brothers. He's a self-proclaimed banker turned human.

 

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