StrictlyVC: October 10, 2016

Happy Monday, everyone!


Top News in the A.M.

Anew study from Germany’s Federal Highway Research Institute has found the autopilot feature of the Tesla Model S constitutes a “considerable traffic hazard.” Unsurprisingly, Tesla CEO Elon Musk doesn’t agree and today said in a tweet that those reports were “not actually based on science.”

Jack Dorsey just tried to rally Twitter around an independent strategy in a new memo.


The IPO Window May be Opening, But Getting Liquid is Tricky for VCs

Venture capitalists and their financial backers may be feeling a skip in their step this week, following the recently successful IPOs of several tech companies, including the cloud software companies Nutanix, Apptio and Coupa Software. In fact, media outlets are already tallying up who’s going to make what off each of the deals.

If only it were so simple.

While there’s plenty of reason for the startup industry to be feeling a wave of optimism, it’s rarely so straightforward as it looks to exit a public company, and it may be even trickier today than in past years.

One primary reason is float. In recent years, more startups have been offering smaller batches of shares to test an uncertain market for tech offerings, as well as to drive up demand through some scarcity. These smaller floats seem to be having the desired effect, at least in the shorter term. But to keep a company’s share price from plummeting once their lock-up period has expired, VCs have to take more care than ever in making distributions to their own investors (or LPs).

“Most companies, even if they’re at a billion-dollar market cap, there’s no float these days, so you have to plan carefully, including selling in tranches,” says managing director Naveen Chadda of the venture firm Mayfield. “If you sell on day one, the stock will take hit, so exit planning is extremely important.”

As you may have noticed, LPs have also grown somewhat impatient. While they continue pouring money into venture firms, those same firms  — some of which hold stakes in more than a dozen so-called unicorns — are also under pressure to act quickly given the eye-catching paper returns LPs have been shown in recent years — and the real returns on which they’ve been waiting.

“Our LPs are very clear with us, which is they are paying us to manage private and not public money,” Marc Andreessen of Andreessen Horowitz told this editor at a recent event, explaining that for the most part, the idea is to pay back the firm’s investors and fast.

It can be a complicated dance.

More here.


New Fundings

Beyond Meat, a six-year-old, El Segundo, Ca.-based company that makes plant-based products and has raised at least $17 million from investors over the years (including from Obvious Ventures, Kleiner Perkins, and Bill Gates), has just sold a five percent stake in its business to the giant meat company Tyson Foods. The dollar amount isn’t being disclosed. Dealbook has more here.

Eve Sleep, a 1.5-year-old, London-based luxury mattress e-tailer, has raised $18.3 million in Series B funding led by Woodford Investment Management, with participation from Channel 4 and earlier backers Octopus Investments and DN Capital. FinSMEs has more here.

OncoResponse, a year-old, Houston, Tex.-based immuno-oncology antibody discovery startup, has raised $7 million in Series A funding from GreatPoint Ventures and Helsinn Investment Fund. More here.

Soundtrap, a four-year-old, Stockholm, Sweden-based cloud-based music and audio recording platform, has raised $6 million in Series A funding led by the Nordic VC firm Industrifonden, with participation from an array of existing investors and other new backers, including former Spotify CFO and COO Peter Sterky. The company has now raised $8.5 million altogether. TechCrunch has more here.

StreetTeam, a five-year-old, London-based company whose sales and marketing software helps brands build, deploy, and manage large decentralized ambassador programs, has raised $10 million in funding. The round was led by Kindred Capital, with participation from Frontline Ventures, Backed and numerous strategic investors, including Universal Music Group, Saatchi Invest, and Peter Davies. TechCrunch has more here.

Vectary, a two-year-old, Bratislava, Slovakia-based startup whose online 3D design tool for modeling and customization aims to provide easy ways to create complex shapes, has raised $2.5 million in funding led by the Berlin-based venture firm BlueYard Capital, with participation from Neulogy Ventures, based in Bratislava. TechCrunch has more here.


New Funds

BioVentures Investors, a Wellesley, Ma.-based venture firm focused on med-tech startups, has closed its fourth fund with $87 million in capital commitments, the firm announced in a news release. It says it has now raised $220 million altogether. More here.

EQT Partners, a Stockholm Sweden-based firm that burst onto the European scene earlier this year with a roughly $600 million growth fund, has now closed its first dedicated U.S. mid-market growth buyout fund with $726 million. EQT was formed by a small group of highly successful European entrepreneurs, including former CEO Kees Koolen. More here.



iRhythm Technologies, a 10-year-old, San Francisco-based developer of cardiac diagnostic monitoring products (one of its products is a 14-day patch), has set its IPO terms to 5.35 million shares being offered at between $13 and $15 per share. Priced in the middle of that range, it would have a fully diluted value of roughly $310 million. iRhythm has raised roughly $200 million in private funding; you can see who owns what here.



Cyanogen, a startup behind its own, alternative version of the Android operating system, has a new CEO. More here.

Rishi Garg has joined the early-stage venture firm Mayfield as a general partner. While readers might recall that Garg’s last full-time gig was Twitter’s VP of corp dev, a role he left in July 2015, he spent the previous two years leading M&A at the payments company Square and before that, logged time at General Catalyst Partners as an entrepreneur-in-residence; at MTV Networks in biz dev; and as an associate with the venture firm Highland Capital Partners, where he focused on software and digital media. We have more for you over at TechCrunch.



McKinsey has published new study showing that 20 to 30 percent of the working age population in the U.S. and Europe engage in independent work, and they largely fall into four categories: free agents, who actively choose independent work and derive their primary income from it; casual earners, who use independent work for supplemental income and do so by choice; reluctants, who make their primary living from independent work but would prefer traditional jobs; and the financially strapped, who do supplemental independent work out of necessity. More here.


Essential Reads

Samsung has now temporarily halted production of the Galaxy Note 7 amid reports that a number of the devices have caught fire. More here.

Netflix wants to brings its products and services to 130 countries around the world. It’s looking like China won’t be one of them, though.

People have become “violently ill” after eating the food bars of venture-backed Soylent; now the company has some theories why.



What 18th-century Paris sounded like.

Eff millennials: why more people are dropping the “f” bomb at the office.


Retail Therapy

Cover clamp. People steal duvets. Don’t let them steal yours.

Filed Under:

Don’t Miss Out!

Sign up today to receive a free daily email with everything you need to start your day. Plus, keep track of the companies and personalities that will shape the industry in the months and years to come. Let StrictlyVC be your very own venture capital concierge.

StrictlyVC on Twitter