Tuesday!

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Top News in the A.M.

Twilio late yesterday reported second-quarter revenue of $64.5 million, up 70 percent from the year earlier period. That beat consensus estimates and sent its shares soaring. More here.

Meanwhile, beleaguered LendingClub revealed that its losses widened to $81.4 million in the second quarter, compared with $4.1 million a year ago. More here.

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Valuations Wilt

A year ago, startup valuations hit a 12-year peak as the numbers of companies joining the billion-dollar-plus club soared.

Today, those numbers are looking far more run of the mill. So suggests a new survey published by law firm Fenwick & West, which analyzed the venture financings of 195 Silicon Valley-based companies over the second quarter to draw its conclusions.

Among the survey’s findings: up rounds — in which a startup’s price per share increases over its previous funding round — are down slightly. Specifically, in the second quarter, they exceeded down rounds 74 percent to 13 percent, compared with the first quarter of 2016, when up rounds exceeded down rounds 78 percent to 11 percent. (The other funding rounds were flat.)

Valuations also dropped, and pretty dramatically. The average percentage change in the share price of companies funded during the quarter showed a 40 percent price increase for the quarter, but that’s down from the 53 percent jump in price that startups saw in the first quarter and the lowest amount since the third quarter of 2010.  Meanwhile, the median price increase of financings in the first quarter was 31 percent, down from 36 percent in the first quarter.

“It’s not like things are so horrible now,” says attorney Barry Kramer, who co-authored the survey. “But this is the third straight quarter of weakening valuations. They’ve fallen a great deal from where they were a year ago. And the question is: where do we go from here?”

Kramer warns against drawing comparisons to the downturns of 2002 and 2008.

(More here.)

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New Funds

Cybrary, a 1.5-year-old, Greenbelt, Md.-based online cyber security training curriculum company, has raised $1.3 million in seed funding led by Arthur Ventures and Ron Gula, founder and chairman of Tenable Network Security. Earlier investors also joined the round, including Inner Loop Capital. More here.

Emotech, a two-year-old, London-based company that’s building a personality-adapting AI-powered robot assistant called Olly, has raised more than $10 million in Series A funding led by Lightning Capital (a new, Shanghai-based firm), with participation from Alliance Capital. TechCrunch has more here.

Engagio, a 1.5-year-old, San Mateo, Ca.-based maker of marketing automation software, has raised $22 million in Series B funding led by Norwest Venture Partners, with participation from FirstMark Capital and Storm Ventures. CMS Wire has more here.

Kepler Communications, a year-old, Toronto-based startup that’s aiming to enable real-time communications access to other spacecraft by developing a constellation of data relaying satellites, has raised $5 million in seed funding from IA Ventures, Liquid 2 Ventures, TechStars, Globalive Capital, BDC, along with angel investors. TechCrunch has more here.

Koko, a two-year-old, New York-based cognitive therapy tech startup, has raised $2.5 million in Series A funding from Omidyar Network and Union Square Ventures. Fast Company has more here.

Kwippit, a two-year-old, Denver-based image-amplified messaging app, has raised $2.5 million in seed funding from Wildcat Capital Management and FirstMark Capital venture partner Dave Leyrer. More here.

Farmers Business Network, a two-year-old, San Carlos, Ca.-based social network and data-sharing platform for farmers, has raised $20 million in new venture funding led by Acre Venture Partners, a food and agriculture specialized fund, with participation from GV, Kleiner Perkins Caufield & Byers, and DBL Partners. The company has now raised $44 million altogether. TechCrunch has more here.

Finexio, a year-old, San Mateo, Ca.-based business-to-business payment network, has raised $1 million in seed funding from Loeb.nyc and numerous angel investors. More here.

FinTecSystems, a two-year-old, Munich-based company that sells data and analysis to the financial services industry, has raised an undisclosed amount of Series A funding that it describes as in the “seven-figure range.” Littlerock and Ventech led the round, with participation from return backers MenschDanke Capital and Heilemann Ventures. More here.

Iconic Therapeutics, a 14-year-old, South San Francisco, Ca.-based clinical stage biopharma company that’s trying to develop and commercialize immunoconjugate proteins that trigger the immune system to destroy invader cells, has added $10 million to close its Series C funding with $48.5 million. Investors in the round include new investor Xeraya Capital, which joins MPM Capital, HBM Healthcare Investments, H.I.G. BioHealth Partners, Lundbeckfonden Ventures, Cormorant Asset Management, and Osage University Partners. More here.

Innoviz Technologies, a months-old, Israel-based autonomous driving tools startup, has raised $9 million in Series A funding from co-founder Zohar Zisapel, along with Israeli VC firms Vertex Venture Capital, Magma Venture Partners, Amiti Ventures and local car retail company Delek Motors. TechCrunch has more here.

MapR Technologies, a seven-year-old, San Jose, Ca.-based enterprise-grade, big data platform, has raised a fresh $50 million in funding led by Future Fund, Australia’s sovereign wealth fund. Earlier backers also joined the round, including Google Capital, Lightspeed Venture Partners, Mayfield Fund, New Enterprise Associates, Qualcomm Ventures, and Redpoint Ventures. TechCrunch has more here.

Hello, dear readers! We flew back last night, and boy are our arms tired. (Hyuck, hyuck.) We didn’t have time to write a column, but we’ll have more for you tomorrow. Hope you had a fun weekend!

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Top News in the A.M.

It’s official. Wal-Mart Stores said today that it’s buying year-old online retailer Jet.com for about $3.3 billion in a deal that will help it to better compete with Amazon.com and other online retailers. Jet co-founder and CEO Marc Lore will continue to run Jet, as well as Walmart’s U.S. e-commerce operations after the acquisition closes, according to Recode.

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New Fundings

Airbnb, the eight-year-old, San Francisco-based room-rental platform, is raising $850 million at a valuation of $30 billion. The company was valued at $25.6 billion last July. TechCrunch has more here.

Aligned TeleHealth, a four-year-old, L.A.-based telehealth healthcare company, has raised $12 million in Series A funding from SV Life Sciences. More here.

Alodokter, a two-year-old, Jakarta, Indonesia-based health information portal, has raised $2.5 million in Series A funding led by Golden Gate Ventures, with participation from earlier backers 500 Startups and entrepreneur Lim Dershing. The outlet e27 has more here.

ByBox, a 16-year-old, Oxfordshire, U.K.-based field service engineer logistics and supply chain technology solutions company, has raised £37.5 million ($48.9 million) in funding from LDC. More here.

CharityStars, a three-year-old, Milan, Italy-based online charity auction platform, has raised €2 million ($2.2 million) in Series A funding led by 360 Capital Partners, with participation from A.S. Roma soccer player Stephan El Sharaawy and LastMinute Group CEO Fabio Cannavale. TechCrunch has more here.

Cleave Biosciences, a six-year-old, Burlingame, Ca.-based biopharmaceutical company that’s developing therapies to treat cancer, has raised $37 million in Series B financing from Celgene, Nextech Invest and Arcus Ventures, along with earlier investors, including 5AM Ventures, Clarus Ventures, New Enterprise Associates, Orbimed Advisors, U.S. Venture Partners, Astellas Venture Management and Osage University Partners. FierceBiotech has more here.

Columbia Asia, a 22-year-old, Bangalore, India-based company that’s focused on serving Asia’s growing middle class with more modern multispecialty hospitals that are located close to where patients live and work, has raised $101 million in funding from Mitsui & Co. The Times of India has more here.

Funding Societies, a year-old, Singapore-based marketplace lending startup, has raised $7.5 million in Series A funding led by Sequoia India. TechCrunch has more here.

Honor, a two-year-old, San Francisco-based startup focused on home care for older adults, has raised $42 million in Series B funding led by Thrive Capital, with participation from 8VC, Andreessen Horowitz, and Syno Capital. The company has now raised $62 million altogether. Business Insider has more here.

Igenomix, a five-year-old, Valencia, Spain-based in-vitro fertilization genetic testing company, has raised an undisclosed amount of growth funding led by Charme Capital Partners, with participation from Aleph Capital, Graham Snudden, and Amadeus Capital Partners. More here.

Kaltura, a nine-year-old, New York-based open-source video platform that enhances websites with customized video, photo, and audio functionalities, has raised $50 million in new funding from Goldman Sachs’s private capital investing group. Dealbook has more here.

Lophius Biosciences, an eight-year-old, Regensburg, Germany-based biotech company focused on the development of T cell-based diagnostic systems for early diagnosis and immunomonitoring in the fields of transplantation, infectious and autoimmune diseases, has raised €4.25 million ($4.7 million) in funding.VRD led the round, with participation from Bayern Capital, Wolf Biotech and WIC. More here.

Numares, a 12-year-old, Regensburg, Germany-based company engaged in commercial NMR-analytics, developing products for medical research, diagnosis and therapy monitoring, has raised €2 million ($2.2 million) in new financing, including from Bayern Capital. FinSMEs has more here.

TheWaveVR, a months-old, Austin, Tex.-based startup that aims to bring virtual reality to music performances, has raised $2.5 million in seed funding from KPCB Edge, Presence Capital, Rothenberg Ventures, RRE Ventures,The VR Fund, Seedcamp, and angel investors. TechCrunch has more here.

TruRating, a three-year-old, London-based point-of-sale customer feedback platform, has raised £9.5 million ($12.6 million) in Series A funding led by Sandaire, an international investment office for families and foundations. TechCrunch has more here.

Vestaron Corporation, a 15-year-old, Kalamazoo, Mi.-based biological insecticide company, has raised $18 million in Series D funding from Pangaea Ventures, Anterra Capital, Cultivian Sandbox Ventures, and Open Prairie Ventures.

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IPOs

LoopUp, a 13-year-old, London-based conference calling startup, will raise $11.7 million in an IPO on the London AIM. Tech.eu has more here.

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Exits

Apple has acquired Turi, a three-year-old, Seattle-based machine learning platform for developers and data scientists, for roughly $200 million. According to CrunchBase, Turi had raised $25.3 million from Madrona Venture Group, New Enterprise Partners, Opus Capital and Vulcan Capital. TechCrunch has more here.

Bridgepoint Development Capital is acquiring Cruise.co.uk, a U.K.-based online travel agent serving its local ocean cruise market, for £52 million ($67.8 million). The nine-year-old, 170-person company was originally part of Carnival Corporation; Risk Capital Partners is the seller.

Dentsu Aegis Network, a subsidiary of Dentsu, will acquire a majority stake in Merkle, a 45-year-old, Columbia, Md.-based data marketing company that had raised $123.5 million in funding from investors, including Technology Crossover Ventures. According to the WSJ, the deal has an enterprise value of $1.5 billion. More here.

Facebook has acquired the team from Eyegroove, a nearly three-year-old, San Francisco-based mobile video startup that had raised $3.5 million from investors, including renowned investor Roger McNamee. TechCrunch has more here.

Google has acquired Orbitera, a five-year-old, West Hollywood, Ca.-based company that has developed a platform for buying and selling cloud-based software. Terms of the deal haven’t been disclosed. Last year, Orbitera raised $2 million in seed funding from Resolute Ventures. TechCrunch has more here.

After 12 years of being a private, family-owned business, headphone maker V-Moda is being acquired by the electronic musical instrument manufacturer Roland. The Verge has more here.
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People

The Washington Post shines a spotlight on Carmen Chang and Connie Chan, two “China whisperers” who help get the big deals done in Silicon Valley.

Politico executive Peter Cherukuri is leaving the company to become president and chief innovation officer for growing tech startup incubator 1776. HuffPo has more here.

Entrepreneur and investor Blake Krikorian passed away suddenly last week, the apparent victim of a heart attack. Krikorian was 48. We’d last talked with him in 2014 and, like many in the Bay Area, we’re very saddened by the news. Recode has more here.

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Essential Reads

Japan’s Fair Trade Commission has raided Amazon’s local office on suspicion of pressuring retailers to offer products on more favorable conditions than on rival sites.

When every company is a tech company, does the label matter?

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Detours

Donald Trump meets Futurama.

What abandoned Olympic venues around the world look like now.

Cupping has its Olympic moment.

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Retail Therapy

The not-so-invisible Invisible Backpack.

We heart Fridays!

Giant thanks to our friend Semil who has stepped in numerous times since StrictlyVC’s launch to help with guest interviews and was a tremendous help with StrictlyVC over the last couple of weeks (including authoring today’s column).

As we mentioned yesterday, we’re shutting entirely for one week, beginning Monday, but we’ll be back in production starting August 8. Take care, everyone, and we’ll see you soon.:)

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Top News in the A.M.

Alphabet and Amazon both beat expectations yesterday during their earnings calls. More here and here.

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Exits and Commitments

Today wraps up the third summer I’ve had the luxury (and wielded the power!) of being a guest curator for StrictlyVC while Connie takes some well-deserved R&R on the beach with her family. This year, along with the standard Q&A’s with fellow investors, I’ve been reflecting on my few years as a small investor. Last Friday, I tried to collect and synthesize the questions I’ve received over the years about starting a fund as an “FAQ.” This Friday, I’ve been thinking about exits.

The job of a fund manager, beyond allocating capital and helping those founders along the way, is to return capital. It’s ultimately the only thing a manager is judged on, professionally speaking. Everyone reading this newsletter already knows that. Yet, on this judgment metric, managers aren’t often in control of how or when those events occur. It typically takes Fund 2’s and 3’s to see what works, and yet, as the old adage goes, past performance is no guarantee of future performance.

For newer, smaller funds like mine and many others, folks hope for public offerings down the road, though lately those outcomes feel harder to come by for a variety of reasons. Folks also hope for large acquisitions, and while many investors believe those may pick up over time, large ones are rare. Then there are secondaries and partial stock sales to newer investors from larger investment firms that have higher thresholds for ownership targets in their fund models.

Investors and pundits chatter enough about an IPO or the large acquisitions they’re involved with or monitoring, but secondaries are not typically discussed for a host of reasons: reputation, private information, signaling, etc. I was afraid to discuss the topic myself until I realized they happen quite frequently, that secondaries have been discussed openly by one of the best venture investors in the world, and that they aren’t that big a deal for smaller funds that aren’t “an investor of record” in a company. (I should be clear here in stating that the investors who take concentrated positions in companies, join their boards, and manage larger funds have many reasons not to engage in secondaries because they need to play for a larger outcome, and any shuffling of a syndicate can be interpreted as a potentially negative signal by the private market.)

Secondaries do not magically occur, however. They require creativity, patience, and, most importantly, the acceptance of other people in the deal on the table, including the existing investors, the new investors, and, of course, the CEO. The early investor has to ask for permission. He or she has to explain their rationale honestly. Signatures need to be collected. He or she still helps out, too. The relationship doesn’t end, and often it’s the companies helping the investor out more than the other way around.

These decisions, I’d argue, are not necessarily intuitive for most small fund managers, most of whom do not have experience managing institutional money. Whereas most very early-stage decisions are made without much data, decisions to sell in future rounds when companies are doing well require an entirely different level of analysis. I can only speak for myself, but I’ve found that process significantly more challenging and the learning curve steeper.

Still, secondaries are still comparatively easy for small funds to execute if they really want to. The absolute dollars at issue are often not material enough to arouse emotions. It’s considerably harder for bigger funds with classic partnership structures, whose general partners may make one to two new investments per year, sit on boards, and continue to follow-on in their investments all the way to the finish line. Larger funds often can’t, like smaller funds, invest in a bunch of companies per year and see what happens; they have to be selective and commit for a longer period of time. They often can’t, like smaller funds, scale down their ownership because those signals may negatively impact a specific company. They often can’t, like smaller funds, not maintain ownership because their fund sizes require large outcomes.

I’m not saying these larger VC firms are saints or always helping out, but it’s a complicated dynamic that’s often overlooked or dismissed in the current environment of exploding company creation and exploding new fund formation. We should keep in mind the commitment of those founders and their early VC investors who take on and embrace long-term risk. Three years into the game, that’s most of what’s on my mind.

Thanks for reading, and welcome back, Connie!

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New Fundings

BP3 Global, a nine-year-old, Austin, Tex.-based maker of data analytics software, has raised $10 million in growth equity funding from Petra Capital Partners. Silicon Hills has more here.

Cloudvirga, a months-old, Irvine, Ca.-based cloud software platform for streamlining the mortgage process, has raised $7.5 million in Series A funding led by Dallas Capital, with participation from Upfront Ventures and Tribeca Angels. The Orange County Business Journal has more here.

Jumia, a four-year-old, Lagos, Nigeria-based online retailer specializing in electronics, fashion, home appliances, and children’s items, has raised $55 million from the Commonwealth Development Corporation, the UK’s development finance institution. Dignited has more here.

LeadGenius, a five-year-old, Berkeley, Ca.-based startup that makes automated sales software, has raised $10 million in Series B funding co-led by Lumia Capital and past investor Sierra Ventures. Other participants in the round include Better Ventures, Bee Partners, Y Combinator, Kapor Capital, Initialized Capital, Fuel Capital, Scrum Ventures and Funders Club. TechCrunch has more here.

Mozio, a five-year-old, San Francisco-based search and booking engine that enables users to find the fastest means of getting to the airports, has raised an undisclosed amount of strategic funding from JetBlue Technology Ventures. Tnooz has more here.

nVision Medical Corp., a 4.5-year-old, Mountain View, Ca.-based biotech startup at work on medical devices to treat infertility caused by fallopian tube dysfunction, has raised $12 million in Series B funding led by Arboretum Ventures, with participation from earlier backer Catalyst Health Ventures. Silicon Valley Business Journal has more here.

Reltio, a five-year-old, Redwood Shores, Ca.-based data management platform, has raised $22 million in Series B funding led by New Enterprise Associates, with participation from earlier backers Crosslink Capital and .406 Ventures. Silicon Valley Business Journal has more here.

Retty, a five-year-old, Tokyo, Japan-based site where users can write reviews about restaurants and diners, has raised $10.5 million in Series D funding led by World Innovation Lab, with participation from ABC Dream Ventures and Eight Road Ventures Japan. The Bridge has more here.

Roomi, a year-old, New York-based marketplace for shared housing, has raised $4 million in seed funding led by DCM Ventures. TechCrunch has more here.

VytronUS, a 10-year-old, Sunnyvale, Ca.-based company whose medical devices are designed to treat cardiac arrhythmias, has raised $49 million in Series C funding, including from Apple Tree Partners, New Enterprise Associates, BioStar Ventures and Windham Venture Partners. More here.

Wonder Workshop, a 3.5-year-old, San Mateo, Ca.-based maker of robots that children can program using mobile devices, has raised $20 million in Series B funding co-led by WI Harper Group and Idea Bulb Ventures, with participation from Learn Capital, CRV, Madrona Venture Group,  and TCL. More here.
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IPOs

Talend, a 10-year-old, Redwood City, Ca.-based big data software company, made a solid debut as a public company today. After pricing its shares at $18 last night, the company began trading on Nasdaq at $27.66, up 54 percent, giving the company an implied valuation of $537 million. TechCrunch has more here.

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People

Garrett Camp, Uber cofounder and CEO of Expa Studios, has unveiled Expa’s latest project, Haus, a real estate play that digitizes the entire process of buying and selling residential property. More here.

Amazon CEO Jeff Bezos just became the third-richest man in the world.

Microsoft is cutting 2,850 more jobs beyond the 1,850 that the company announced would be eliminated earlier this year.  The new cuts will hit phone hardware and sales. ZDNet has the story.

Facebook COO Sheryl Sandberg has almost completed a new book tentatively titled “Option B” that focuses on healing from adversity and coping with those difficult circumstances. Recode has more here.

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Data

A new study from SurveyMonkey reveals the 30 most-downloaded and most-used apps in the U.S. iOS and Android app stores so far this year. More here.

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Essential Reads

Apple has hired the former head of BlackBerry  automotive software division as its car team places increased emphasis on developing self-driving technology over efforts to design its own vehicle, says Bloomberg. More here.

Perhaps in preparation for a someday self-driving fleet, Uber has launched a program called UberCentral that allows businesses of any size to request, pay for, and manage rides for customers from a centralized dashboard. TechCrunch has more here.

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Detours

The unraveling of Harvard’s star trading desk.

What your brain looks like when it solves a math problem.

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Retail Therapy

Alpha Tiny House.

And it is Thursday! Today’s Q&A brought to you again by the dexterous Semil Shah.

Also, an important programming note, or a no-programming note(?): StrictlyVC will not go out to readers next week. We do this about two separate weeks each year to give Connie a full and complete break so she doesn’t lose her mind. The good news: we’ll be back in full form on August 8!

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Top News in the A.M.

Facebook crushed its second quarter earnings and saw its shares hit a new high yesterday as a result. More here.

Oracle is acquiring the cloud software provider NetSuite for about $9.3 billion, or $109 per share, in an all-cash deal, the companies announced this morning. More here.

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VC Kent Goldman on Changing Dynamics Between Seed-Stage Firms

Two years ago, Kent Goldman, a former partner with First Round Capital, took the wraps off his own seed-stage venture firm and the novel idea that it incorporates. Specifically, Goldman said that his new firm, Upside Partnership, would give every founding team that it backs a piece of its own carry, effectively making them Upside’s partners.

Investors liked the idea, committing $30 million to Goldman’s debut fund, and committing another $44 million to his second fund, which closed earlier this year. We caught up with him recently to talk about the current, seed-stage ecosystem. More from that chat below.

In the consumer tech landscape today, what are some consumer behaviors you’re tracking that could lead to new products, services or networks?

It’s been a pretty long time since I’ve taken a thematic approach to investing. I try to be proactive about people rather than ideas. Founders are much better at seeing the future than investors, so my focus is really on finding people who’ve been thinking about and working through solutions far longer than I’ve even known a problem exists.

I have gotten wrapped around the conversational UI axle. Some of Upside’s earliest investments were behind founders building companies around text-based conversational UIs. With the attention now being paid to voice interfaces, it’s been difficult not to revisit the idea of a disappearing UI and the challenges they present to our collective learning around visual interfaces. For example, we’re used to having app icons to remind people about the existence of apps they’ve already downloaded. We’re used to visual design being used as a method to introduce new features. But how do you remind a user of skill they added to their Amazon Echo? What’s the audio equivalent of an app tutorial? How do you train a user to a specific conversational app syntax? What’s the audio corollary of a badge count? It’s been fun to kick around these questions with folks.

With one fund of Upside Partnership under your belt, what’s been the single-most surprising element of running the fund?

The biggest surprise is that we’ve been the first institutional investor to commit to funding a founding team in the majority of our investments. Our typical initial investment is very deliberately around $300,000. Because Upside was formed with the intention of playing well with other investors, I thought it was more likely that we would be tucked into a round after a lead was chosen. More often than not, it’s been the opposite. It’s been a gratifying development.

Another surprise was that four of our first eight investments backed female founders.

How do you anticipate seed syndicates changing as more investors enter the mix and smaller funds begin to scale? 

It’s going to get a bit edgy in syndicate land. When I joined First Round, back in “super angel” days of 2008, I saw how much support founders could get when their investor syndicates were working in alignment with one another. But as the seed landscape evolved, becoming the lead investor or hitting arbitrary ownership targets became increasingly important to a number of funds.

At some point investors decide whether they believe special founders drive outsized returns or concentrated ownership does. I strongly believe it’s the former, so I decided to build a fund that would be focused on overachieving as a syndicate member. This means investing time to help regardless of your check size. And it means there is a bit more freedom to support the founders you want to work with. One way to do this well is to keep fund sizes small.

As many emerging funds make the decision to grow their size and set a goal to lead rounds, they’re going to discover that it’s much more challenging to directly compete with elite firms like First Round than it is to work alongside them. In doing so, they’re making the decision to put their access to great founders in jeopardy. It’s always been a puzzling strategic choice to me; do they want to scale fund size or do they want to scale returns?

Many of your seed deals have gone on to raised Series A rounds. How does the nature of your work with companies change after that Series A closes?

I’m most engaged with founders at the seed stage. The challenges they face are the ones I best understand. As their companies scale beyond into Series B territory, the decisions they face fall outside of my focus. By this point, I hope to have earned enough of their confidence that they will still consider me a trusted counsel – it’s the way I hope to earn the opportunity to make follow-on investments in their businesses. But, as companies age, I anticipate becoming more reactive, rather than proactive.

In the context of early-stage investing, what’s something that you believe that isn’t necessarily a popularly held point of view?

Investors stand on the shoulders of founders. And often founders, not investors, give other founders the best operational advice. It’s why we make each founder we back a partner in our fund. Venture firm’s brands are built on the smarts and fortitude of the people they back. It’s wise to recognize this with more than hollow lip service.

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New Fundings

Cronycle, a three-year-old, London-based collaborative research platform that enables users to filter through articles on Twitter and RSS feeds to find relevant content, has raised $2.6 million in Series A funding from Andurance Ventures. TechCrunch has more here.

EverFi, an eight-year-old, Washington, D.C.-based education software startup, has raised $40 million in Series C funding from Amazon CEO Jeff Bezos, Alphabet Chairman Eric Schmidt, New Enterprise Associates and Rethink Education. Fortune has more here.

Good Eggs, a five-year-old, San Francisco-based online grocer that claims to deliver top local, organic produce, along with sustainable meat and fish, has raised $15 million in new funding led by Index Ventures. TechCrunch has more here.

Matific, a nearly four-year-old, New York-based ed tech company, has raised $45 million in Series B funding led by cofounder Leon Kamenev. GeekTime has more here.

Paidy, a Tokyo, Japan-based cardless e-commerce payment and instant credit service, has raised $15 million in Series B funding led by Eight Roads (the investment arm of Fidelity), and SBI Holdings. Other participants include Itochu Corporation and earlier investors Arbor Ventures and SIG Asia. TechCrunch has more here.

Peek, a four-year-old, San Francisco-based startup that lets people book tours and activities, has raised $10 million in funding from individual investors, including Trulia founder Pete Flint, TPG co-CEO David Bonderman, and former Kleiner Perkins partner Ray Lane. TechCrunch has more here.

PhishMe, a five-year-old, Leesburg, Va.-based cybersecurity platform turns employees into an active line of defense by enabling them to identify, report, and mitigate spear phishing attacks, has raised $42.5 million in Series C funding led by earlier Paladin Capital Group, with participation from Bessemer Venture Partners. More here.

Phosphorus, a months-old, New York-based computational genomics company that’s focused on fertility, has raised $10 million in Series A funding led by FirstMark Capital. TechCrunch has more here.

Poq, a five-year-old, London-based app commerce startup, has raised $4 million in Series A funding led by Beringea, with participation from Seedcampand Venrex. More here.

RedWave Energy, a five-year-old, Glen Ellyn, Il.-based company that’s developing technology to generate renewable energy from the previously untapped infrared (IR) and near IR spectrum, has raised $5.5 million in funding led by Energy Foundry. Other participants include Northwater Capital, Prime Coalition and a Kuwaiti sovereign wealth fund. The Chicago Tribune has more here.

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IPOs

Tomorrow, Talend, a 10-year-old, Redwood City, Ca.-based big data software company, is going public in what will be the second IPO for a venture-backed Bay Area tech company this year. The San Francisco Chronicle has more here.

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Exits

Private equity eats another software company. This time, OMERS Private Equity and funds managed by Harvest Partners are paying about $1 billion to acquire publicly traded Epiq, an outfit that sells IT services like electronic discovery to the legal profession. More here.

—–

People

Tech entrepreneur Michael Bloomberg didn’t mince words last night at the Democratic National Convention, calling fellow billionaire businessman Donald Trump a con man. More here.

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Jobs

SherpaFoundry, the strategic advisory firm of the venture firm Sherpa Capital (it makes connections between startups and corporations), is looking for what it calls a coverage partner. It sounds largely like a corporate development position — you’d be trying to drum up new corporate members, identifying startups with compelling teams, developing sector maps, etc — and it requires five to 10 years of experience. To apply, reach out to SherpaFoundry CEO Neal Hansch at neal@sherpafoundry.com.

—–

Data

According to a new Cambridge Associates report, endowment portfolios with more than 15 percent allocated to private investments have outperformed their peers consistently, and for decades. Read it here.

—–

Essential Reads

Facebook sees two billion searches a day, but it’s attacking Twitter, not Google.

SoundCloud‘s owners are considering a sale that could value the German music streaming company at $1 billion, according to Bloomberg. More here.

—–

Detours

A guide to guerilla parenting.

Confessor. Feminist. Adult. What the hell happened to Howard Stern?

—–

Retail Therapy

A 1939 Alfa Romeo 8C 2900B Lungo Spider by Touring. Starting price: $20 million.

Hi, happy Wednesday, everyone. Today’s Q&A is brought to you again courtesy of investor Semil Shah, as Connie’s off shooting Nerf guns with her sons somewhere. (Thanks, Semil!)

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Top News in the A.M.

Twitter reported its earnings yesterday, and the newest number to bother Wall Street centers on its revenue growth, which has fallen dramatically. The company’s shares are down 13 percent today as a result.

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Quick Chat with Avidan Ross

A year ago, Avidan Ross, an investor with an engineering background, raised a debut, $31.4 million, fund under the brand Root Ventures. The idea was to back early-stage hardware startups — eight to 10 of them each year. StrictlyVC talked with Ross at the time; we more recently caught up with him to ask how things are going, one year into his newest adventure.

Imagine a new consumer hardware startup team forming. In an ideal world, what kind of team should it assemble if it aims to become an MVP in the consumer market?

I hate to say this, but it depends. If the team is building some deeply technical hardware with ongoing material science development, then there better be a material scientist on board. Generically, I’d say that at least one person on the team has to be ready to roll up their sleeves and deal with the business development side of the startup. That means everything from sales and marketing to fundraising and operations. The core tech of the company should never be outsourced, so we love seeing a very strong technical team. No matter the team’s professional background, the most important element is a passion for the problem the business is solving. Building hardware companies is way too hard to just be opportunist. Hardware founders have to be driven by a deep fire that will not let them sleep until the problem is solved.

You’ve been at this for a year. What’s been the single-most surprising element of running your fund so far?

The help from my LPs. Seriously, I’m not just kissing up to the folks who gave me money. My LP base is far more diverse than the average Silicon Valley fund. We took funds from individuals and institutions, but their industrial affiliation is widely varied, from medical to real estate to manufacturing and logistics. When you’re working on hardware, the industries and partners you’re looking for aren’t just spread across industry but also geographically diverse. Most other firms can get away with extremely deep relationships along the 101 freeway. We had to go broader, and a strong LP network has been helpful in generating great strategic relationships in every possible industry.

With all of the startups going after the smart home market, how did Amazon Echo just cut through the noise? What can founders and investors in the space learn from Echo’s success?

I think the main reason for Alexa’s success is the intuitive natural user-interface. Alexa works because she is listening when your hands are full or you’re deeply sitting in the couch. Also, Alexa launched with a very basic first set of functions, making the interaction simple and intuitive. When people interface with software, a counterintuitive experience such as Snapchat actually becomes a feature. In the world of physical objects, the design should be first and foremost intuitive and delightful. I think that founders of hardware startups often think this is just about industrial design, but Echo showed us that it’s more about an intuitive user experience, and interaction is the core.

You recently opened up a new SF office, or should we say, workshop. Tell us about how you designed and built it. How can people check it out?

I like building things. My home garage is a mini maker space, filled with CNC routers, laser cutters, and 3D printers. As our team grew, it became clear that we needed a little bit of space to call our own. Just like the garage, it seemed only natural to make it an inspiring workshop. Our friends at Dodocase were kind enough to share some of their factory in the [the San Francisco neighborhood] Dogpatch with us, and we’ve been working there ever since. Instead of creating an office with a lobby, reception, and conference rooms, it’s an open access space for entrepreneurs to collaborate and ideate on designs. We have a café inside the space to keep everyone properly caffeinated, beer taps for meetups, and have access to the larger equipment within Dodocase when someone wants to go big. If anyone wants to come hang, tweet at @rootvc or @avidanross, and we’ll get you some machine time.

In the context of early-stage investing, what’s something that you believe that isn’t necessarily a popularly held point of view?

I think that most hardware companies should never take venture money. If you walk down the aisles of a Best Buy or a Target, nearly all those products were never venture backed. Do not feel pressured to measure your success as your ability to raise venture capital. If your product has the ability to be a Trojan horse for a much larger recurring revenue or network-effect-driven business, it might be worth pursuing venture investment.

I like to think of entrepreneurs as fire starters. You can build a fire with brush, then twigs, then branches, and while it might take a while, the flame is sustainable. Meanwhile, venture capital is like gasoline. If your fire is not built to consume the fuel, it can [destroy your business].

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New Fundings

Automile, a three-year-old, Palo Alto, Ca.-based startup that makes tracking software for fleet management, has raised $6.2 million led by SaaStr Fund, with participation from earlier backers Dawn Capital, Point Nine Capital and individual angels, including Justin Kan and Niklas Zennstrom. VentureBeat has more here.

B12, a year-old, New York-based startup that build websites with A.I. and human help, has raised $12.4 million in Series A funding from General Catalyst Partners, Breyer Capital, Founder Collective, and SV Angel. VentureBeat has more here.

Big Health, a year-old, London-based startup that aims to come up with numerous digital behavioral health programs, beginning with a sleep product called Sleepio, has raised $12 million in new funding led by Octopus Ventures, with participation from Kaiser Permanente Ventures, Index Ventures, and numerous individual investors. TechCrunch has more here.

Black Bear Energy, a year-old, Boulder, Co.-based startup that provides services to commercial renewable energy buyers, has raised $2.5 million in Series A funding led by Boulder Ventures, with participation from earlier investor Rocky Mountain Institute. BizWest has more here.

CellMax Life, a three-year-old, Mountain View, Ca.-based cancer blood-testing company, has raised $9 million in Series A-1 funding led by Artiman Ventures, with participation from Taiwanese investors, including Acer founder Stan Shih. More here.

Density, a two-year-old, San Francisco-based startup that’s launching a people-counting sensor to measure how many people are inside a space at any given time, has raised $4 million in Series A  funding led by Upfront Ventures, with participation from Ludlow Ventures, Jason Calacanis, Dawn Patrol, Hiten Shah and Arjun Sethi. TechCrunch has more here.

Nomad Health, a 1.5-year-old, New York-based online marketplace connecting doctors with freelance clinical work, has raised $4 million in Series A funding co-led by First Round Capital and RRE Ventures, with participation from .406 Ventures. More here.

Prospera, a 2.5-year-old, Tel Aviv, Israel-based company whose software tools aim to help growers optimize their crops, has raised $7 million in Series A funding led by Bessemer Venture Partners. TechCrunch has more here.

SafeBreach, a two-year-old, Sunnyvale, Ca.-based cybersecurity startup that generates war games simulations within organizations’ information systems to detect any vulnerabilities, has raised $15 million in Series A funding from Deutsche Telekom Capital Partners, Hewlett Packard Pathfinder and Maverick Ventures, along with earlier investors Sequoia Capital and Shlomo Kramer. SecurityWeek has more here.

Shipt, a 2.5-year-old, Birmingham, Ala.-based online grocery marketplace, has raised $20.1 million in Series A funding from Greycroft Partners, Harbert Growth Partners and e.ventures. TechCrunch has more here.

Sun Basket, a two-year-old, San Francisco-based organic meal kit provider, has raised $15 million in Series B funding led by Accolade Partners, with participation from Founders Circle, Shea Ventures and earlier investors Vulcan Capital, PivotNorth, Relevance Capital, Filter14 and Baseline Ventures. GeekWire has more here.

Vtesse, a 1.5-year-old, Gaithersburg, Md.-based drug developer focused on rate life-threatening diseases like Niemann-Pick Type C1 disease, has raised $17 million in Series A funding, including from Alexandria Venture Investments, Bay City Capital, Lundbeckfond Ventures, and earlier investors New Enterprise Associates and Pfizer (which helped create the orphan disease incubator). FierceBiotech has more here.

Upthere, a five-year-old, Palo Alto, Ca.-based personal cloud storage service, has raised $77 million led by KPCB and Western Digital, along with Elevation Partners, Floodgate, GV, NTT Docomo Ventures, and Square 1 Bank. TechCrunch has more here.

Zeek, a 2.5-year-old, Tel Aviv, Israel-based startup whose app lets you buy and sell unwanted store gift vouchers, has raised $9.5 million in Series B funding led by Scale-Up Venture Capital, with participation from long list of additional investors, including Blumberg Capital, Qualcomm Ventures, FJ Labs, Uri Levine, Emery Capital, Ton Ventures, Radiant Venture Capital, iAngels and Target Global. TechCrunch has more here.

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Exits

Analog Devices is buying fellow chipmaker Linear Technology for about $14.8 billion. Analog’s $60-per-share offer represents a premium of nearly 24 percent to Linear’s Monday close. Reuters has more here.

LeEco, the China-based multidisciplined powerhouse (it has a video streaming service, and makes TVs, smartphones and even has a car in the works) is acquiring 14-year-old Vizio, a California-based budget TV manufacturer, for $2 billion. TechCrunch has more here

LogMeIn, a Boston-based company that offers a web conferencing service, is acquiring Citrix-owned rival GoToMeeting. The deal is valued at about $1.8 billion. Fortune has more here.

Myntra, a fashion portal owned by Indian e-commerce platform Flipkart, has acquired Indian e-commerce site Jabong from Rocket Internet for $70 million. According to LiveMint, Jabong’s value had “collapsed” over the last year, owing to leadership issues, market share losses, and a funding crunch. More here.

Skully, a venture-backed company that had famously promised beautiful augmented reality motorcycle helmets, is no more, says TechCrunch. More here.

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People

Gunnard Johnson, who specializes in advertising analytics and was hired by Snapchat earlier this year, has left to join the digital pinboard company Pinterest as its head of measurement science and insights, leading a new team of 12 employees. Fortune has more here.

The payday of Yahoo CEO Marissa Mayer is even more insane that you may have heard.

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Jobs

Trinity Ventures is looking to fill two associate positions, one focused on consumer investing and one on enterprise and business-to-business investing. The jobs are on Sand Hill Road in Menlo Park, Ca. You can send your resumes to info@trinityventures.com.

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Essential Reads

The inside story Of Pokémon GO’s evolution from Google castoff to global phenomenon.

Tesla has finally shown off its massive battery factory in Reno, Nev.

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Detours

The average legal pot user spends $647 a year on weed.

The three-year process to redesign the FDA’s nutrition label.

This sure sounds like one crazy hedge fund(!).

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Retail Therapy

Major pieces from Philip Johnson’s landmark 1959 Four Seasons restaurant are set to hit the auction block. You can check out the goods here.

Happy Tuesday! Today’s column brought to you by the prolific Semil Shah while Connie swelters somewhere under the Heat Dome.

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Top News in the A.M.

What you should expect from today’s Apple, Verizon and Twitter earnings reports.

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Chatting with Jenny Lefcourt of Freestyle Capital

A little more than two years ago, Jenny Lefcourt, who cofounded the wedding registry startup WeddingChannel.com and a short-lived e-commerce company called Marrkit, made the leap into venture capital.

Specifically, the Stanford MBA joined Freestyle Capital founders Josh Felser and Dave Samuel at their small but growing seed-stage fund, and she’s been helping build the firm’s brand and the rest of its business since.

We caught up with her recently to talk about her newest gig.

You’re the newest GP at Freestyle, a seed-stage fund. What’s been the most surprising part of the transition? 

I’m still an entrepreneur at heart and felt that being a seed-stage VC would enable me to add the most value to my portfolio companies while also being the most exciting and fulfilling for me as an investor. Compared to being an entrepreneur, I expected the highs to not be as high but the lows not as low, but I’ve been surprised by how high the highs are. [Watching] my entrepreneurs and their companies develop from tiny to thriving has been more of a thrill than I had imagined. I’ve also been surprised and delighted by the depth of relationships I’ve developed with my entrepreneurs. Being in the trenches with them creates quite a bond.

As some micro funds grow and add partners, what would be your advice as to how they integrate new faces?

My advice to a micro fund looking to add a partner would be to add someone who has a different lens on the world and that you trust and respect.  Groupthink can be deadly to a partnership, so you need to ensure that you not only have differing points of view but that you have a relationship between the partners that welcomes debate.  Josh, Dave and I have hearty debates, we each have unique skill sets that help Freestyle’s portfolio companies. Also, and important to me, we laugh a lot. Laughter is really underrated as the glue that holds people and teams together.

You have deep experience in retail, both as a founder and an investor. What are your views on how consumer retail transforms over the next decade? Is there any chance to find a category that Amazon won’t gobble up?

I believe there is going to be a big pendulum swing back to curation and service. The internet delivered access to so much inventory online, which was thrilling to online shoppers for a while.  Now, consumers find it hard to sift through the options and are ready for fewer, more personalized offerings.  This will require retailers to use the data they have on their consumers and provide more service to make a sale. Retailers will also need to truly become omnichannel —  the most overused and not-delivered-upon concept in retail — to provide the unique experiences that will keep them competitive in the Amazon-versus-everyone else world that we live in.

As Freestyle grows, how have you and partners evolved your thinking around follow-on funding for your seed companies?

We’ve reserved a greater percentage of our recent funds for follow-on financings than we used to. We’re usually participating in our pro-rata for Series A and sometimes Series B, and we’ll “back up the truck” for some of our best performing companies. Our usual initial check size is between $500,000 to $1 million, and our entrepreneurs are typically raising between $2 million to $3 million.  We lead rounds and write big checks for our fund size because our model is to work very hard and closely with the teams that we back.

In the context of early-stage investing, what’s something that you believe that isn’t necessarily a popularly held point of view?

I don’t seek out high-profile entrepreneurs who I know many VCs are attracted to. I find that high-profile entrepreneurs can be distracted by the many invites they get to networking events, speaking engagements, parties, advising, etc.  The entrepreneurs I have backed have all been heads-down and hard-working people who surgically apply networking. Between Josh, Dave and I — and others with whom we coinvest — we can get our teams in front of just about anyone they desire to meet.  So, while the entrepreneurs who attend events like Summit at Sea are smart, hard-working and fabulous, they’re not typically the entrepreneurs I choose to invest in.

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New Fundings

Acalvio Technologies, a year-old, Santa Clara, Ca.-based threat detection technology startup, has raised $17 million in new funding from investors, including Accel Partners, Ignition Partners and Eileses Capital. TechCrunch has more here.

Reflect, a year-old, Portland, Or.-based data visualization service, has raised $2.5 million in seed funding led by DFJ. Other participants include Founders’ Co-Op, Liquid 2 Ventures (Joe Montana’s investment vehicle), Techstars, Stanford University and a number of angel investors, including Parse co-founder Ilya Sukhar. TechCrunch has more here.

Scopely, a five-year-old, Culver City, Ca.-based mobile entertainment network, has raised $55 million in fresh funding led by Greycroft Growth Fund, with participation from Elephant Partners (the new fund of Warby Parker co-founder Andy Hunt and former Highland Capital colleague and partner Jeremiah Daly); Evolution Media Partners, a partnership of CAA-backed Evolution Media Capital; TPG Growth; Participant Media; Highland Capital; Sands Capital Ventures; and Take-Two Interactive. More here.

Takt, a year-old, San Francisco-based real-time marketing personalization platform, has raised $30 million in Series A funding led by BCG Digital Ventures, with participation from Starbucks. More here.

Transfix, a three-year-old, New York-based tech platform that provides brokerage services to independent over-the-road truck drivers and small carriers, has raised $22 million in Series B funding led by  New Enterprise Associates, with participation from earlier backers Canvas Ventures, Lerer Hippeau Ventures, and Corigin Ventures. Connie talked with the company last November to learn more.

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New Funds

Volition Capital, a six-year-old, Boston-based growth-stage investment firm, has closed its third fund with $250 million. TechCrunch has more here.

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Exits

Hailo, a five-year-old, London-based, smartphone-based taxi-hailing service, has sold 60 percent of its company to Mercedes-Benz owner Daimler and will rebrand its operations under MyTaxi, another on-demand ride-sharing company that was acquired by Daimler subsidiary Moovel in 2014. TechCrunch has more here.

Taboola, the startup behind the publishing widget that recommends more content at the end of articles online, has acquired ConvertMedia, a recommendation engine designed specifically to sniff out and recommend online videos at scale. TechCrunch is reporting the price at just shy of $100 million. More here.

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People

Beats cofounder Dr. Dre was reportedly placed in handcuffs and searched by police after a confrontation with a man whose car was parked in front of his Malibu home on Monday. More here.

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Essential Reads

Twitter tries to explain itself, again.

Thinking of suing Uber? Let this be a warning.

An investment banking analyst just downgraded Apple, saying it has “peaked.”

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Detours

A century of trends in adult human height.

What Team USA wears to work.

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Retail Therapy

“Ahh, I’ve created a monster.” (For that little startup in your life.)