INSUBCONTINENT EXCLUSIVE:
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While consumer tech has
matured as a startup category in recent years, many investors continue to be bullish on specific trends like online gaming, voice, and the
unbundling of platforms in favor of focused social networks
That the key takeaway from a survey that Josh Constine and Arman Tabatabai did this week with 16 of the most active investors in key social
product categories over on Extra Crunch
Here an excerpt of the responses, from Olivia Moore and Justine Moore of CRV:
Unbundling of YouTube.& You can build a big company by
targeting a vertical within YouTube with a product that has better features and more opportunities for creator monetization
Twitch is a great example of this! We&re also watching early-stage companies like Supergreat (in beauty) and Tingles (ASMR).
Voice as a
Voice continues to pick up steam as a broadcast medium via podcasting, but we haven''t seen a lot in social or P2P voice yet
We think a successful platform will leverage the fact that voice content can be created and consumed while doing other things
We&re big fans of companies like TTYL and Drivetime that are making strides here!
Flexible digital identities
Gen Zers are online constantly but have different preferences across platforms/friend groups about how they want to &show up& digitally
The rise of &Finsta& accounts is one good example of this
Companies like Facemoji already help users create social content using a curated digital avatar — we&re excited to see what else founders
build here!
Synchronous, shared mobile experiences
We&re bullish on apps that connect users in real time to have a shared social experience
Most apps now are &single-player,& which creates scroll fatigue
HQ Trivia was an early example more on the entertainment side, while companies like Squad help users browse the internet and watch TikTok
together.
Other respondees include:Connie Chan (Andreessen Horowitz)
Alexis Ohanian (Initialized Capital), Niko Bonatsos (General Catalyst),Josh Coyne (Kleiner Perkins), Wayne Hu (Signal Fire), Alexia Bonatsos
(Dream Machine), Josh Elman (angel investor), Aydin Senkut (Felicis Ventures), James Currier (NFX), Pippa Lamb (Sweet Capital), Christian
Dorffer (Sweet Capital), Jim Scheinman (Maven Ventures), Eva Casanova (Day One Ventures) and Dan Ciporin (Canaan).
EC subscribers please
note: a second part of this survey will be running this coming week, focused specifically on social investing in the COVID-19 era.
Are VCs
investing — or maintaining?
Speaking of financing, who is actually writing checks right at this moment in time?
I&ve seen a lot of VCs
talking about being open for business,& Eniac Ventures founding partner Hadley Harris proclaimed on a fundraising-trend panel this week,
&and I&ve been pretty outspoken on Twitter that I think that largely bullshit and sends the wrong message to entrepreneurs.Instead, as
Connie Loizos covered for us on TechCrunch, he said he didn''t have time to talk to more founders because he was so busy helping existing
Not every investor agrees with that viewpoint — VC Twitter features many an anecdote about fresh companies getting funding.
Let just hope
that both things are true, because it is already rough out there.
Does your startup qualify for a PPP loan? (And should you apply?)
Two
debates have been raging around government support for startups
First, the big, messy new Paycheck Protection Program — designed to cover expenses for small businesses — does seem to be somewhat
available to startups, based on revisions published by the Small Business Administration late last week
But things get complicated quick depending on your fundraising and cap table, as Jon Shieber covered last weekend for TechCrunch
Venture firms typically have controlling interests in a portfolio of companies that total more than 500 people, so if such a firm also has a
controlling interest in your startup, you may not be eligible
Even if the VC stake is under 50%, preferred terms that came with the fundraising may your application afoul of the rules.
To help founders
work through their own situations faster, startup lawyer William Carleton wrote a quick guide for Extra Crunch
Here where he says you need to start:
Do you have a minority investor which controls protective covenants in your charter, or which controls
a board seat afforded certain veto rights on board decisions? If the answer to either fork of that question is &yes,& you almost certainly
have confirmed that you will need to amend your charter and/or other governing documents before proceeding with a PPP application.
The other
aspect, of course, is whether startups should be applying for this in the first place
Congress broadly intended the money to go towards small to medium sized businesses, most of whom would never be considered for venture
Shieber article is full of comments on that topic, if you feel like weighing in….
The commercial real estate comeuppance
If you&re like
me, and you&ve started companies in the Bay Area and struggled to find office space you could afford, enjoy this bit of schadenfraude as you
plot your remote-first future
Because the commercial real estate industry is facing an existential crisis after many, many years of rent-seeking upon the Silicon Valley
tech economy (and everyone else).
Connie explored this exploding topic with a range of startups, investors and CRE agents in a big feature
One analyst &expects the market to come down by ‘at least 10% and probably 20% to 30%& from where commercial space in San Francisco has
priced in several years, which is $88 per square foot, according to CBRE
Driving the expected drop is the 2 million square feet that will come onto the market in the city as soon as it possible — space that
companies want to get off their books.
It quite possible to imagine even bigger declines, given the broader hits that most any possible
tenant is also taking to their budgets
Who knows, maybe this whole process will even help make the Bay Area and other wealthy metros a little more affordable again.
Edtech gets
hot again, according to investors
After lots of money and lots of struggle over the past decade, edtech is suddenly hot again thanks to the
Natasha Mascaranhas has been covering the trend recently, and dug in this week with a big investor survey on the category for Extra
Crunch.
One investor pivoted from spending a third of their time looking at edtech companies to devoting almost all their time to the
&Another, who has been bullish for years on edtech, says its business as usual for them, but that competition may arise
An ed-tech focused fund thinks the sector has been underfunded for a while, so the moment of reckoning has begun.
Respondents include:
Jenny
Lee,GGV
Tetyana Astashkina,LearnLaunch
Jean Hammond,LearnLaunch
Marlon Nichols,MaC Venture Capital
Mercedes Bent,Lightspeed Venture
Partners
Jennifer Carolan,Reach Capital
Shauntel Garvey,Reach Capital
Jan Lynn-Matern,Emerge Education
Lesa Mitchell,Techstars
Tory
Patterson,Owl Ventures
Ian Chiu,Owl Ventures
Tony Wang,500 Startups
Across the week:
TechCrunch
Economists haven''t thrown out the models
yet (but they will)
Five CEOs on their evolution in the femtech space
Equity Monday: Hunting for green shoots amid the startup data
Extra
Crunch
How SaaS startups should plan for a turbulent Q2
Fintech uneven new reality has helped some startups, harmed others
Fast-changing
regulations give virtual care startups a chance to seize the moment
Twilio CEO Jeff Lawson on shifting a 3,000-person company to fully
remote
Amid unicorn layoffs, Boston startups reflect on the future
#EquityPod
From Alex:
We started with a look atClearbancand itsrunway
extensionnot-a-loanprogram, which may help startups survive that are running low on cash
Natasha covered it for TechCrunch
Most of us know about Clearbanc revenue-based financing model; this is a twist
But it good to see companies work to adapt their products to help other startups survive.
Next we chatted about a few rounds that Danny
covered, namelySila $7.7 million investmentto help build technology that could take on the venerable and vulnerable ACH, andCadence $4
million raiseto help with securitization
Even better, per Danny, they are both blockchain-using companies
And they are useful! Blockchain, while you were looking elsewhere, has done some cool stuff at last.
Sticking to our fintech theme — the
show wound up being super fintech-heavy, which was an accident — weturned to SoFi huge $1.2 billion deal to buy Galileo, a Utah-based
payments company that helps power a big piece of UK-based fintech
SoFi is going into the B2B fintech world after first attacking the B2C realm; we reckon that if it can pull the move off, other financial
technology companies might follow suit.
Tidying up all the fintech stories isthis round up from Natasha and Alex, working to figure out who
in fintech is doing poorly, who hiding for now, and who is crushing it in the new economic reality.
Next we touched on layoffs
generally,layoffs at Toast,AngelList, andnotLinkedIn— for now
Per their plans to not have plans to have layoffs
You figure that out.
And then at the end, we capped withgood news from Thriveand Index
Wedidn''t get to Shippo, sadly
Next time!
Listen to the full thing here!
