StrictlyVC: August 10, 2017

Happy Thursday, everyone! We’re still on our work-ation, which we could more or less call “working odd hours in a new location every week.” In the meantime, we want to thank our friend and investor, Semil Shah, who offered to help us with SVC by interviewing founders and VCs about how they raised their first Series A rounds and first funds.

For today’s column, Semil talks with Paul Martino, cofounder of Bullpen Capital where, full disclosure, he was once a paid consultant. It’s worth checking out; Martino is fairly candid about LP priorities that you might not expect.

Top News in the A.M.

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How I Raised It: Bullpen’s Paul Martino on How to Close a Fund

By Semil Shah

Paul Martino is a founder and general partner at Bullpen Capital, a San Francisco-based, early-stage, post-seed venture fund investing in technology companies that have already been funded by super-angels and institutional seed funds. Prior to forming Bullpen, Paul Martino was the CEO of Aggregate Knowledge and, before that, the CTO of Tribe. We talked with him recently to learn more about how Bullpen got off the ground.

How many LP meetings did it take to raise Bullpen’s first fund, and what was its initial target?

It took around 200 LP meetings over two years. We started in 2011. Friends and family signed on quickly, but of the roughly 150 meetings, we held with new contacts, about 25 panned out. Our initial target was $50 million, and we raised $25 million in two closes. The first close was $8 million, and the second close of $17 million came a year and a half later. By that point, we could show some good companies like FanDuel. In the end, we closed with 65 LPs in that first fund and we wound up deploying it over three years, in 28 companies.

Was it mostly individuals? Did you have any traditional “institutional” LPs?

We had one traditional LP – Greenspring Associates.

Looking back now, were there mistakes you can share? Lessons learned?

Mistakes is the wrong word, but we learned some lessons. People who raise funds successfully tend to be experienced GPs who left big firms. If, like Bullpen, you’re a team of three new GPs without any significant LP relations, doors shut in ways you wouldn’t anticipate.

Duncan (Davidson), Rich (Melmon), and I had started a combined dozen companies, but we didn’t have a significant relationship with any traditional LPs, so we got outflanked many times by people with middling investment records who’d left larger, established funds. The lesson was to start a fund with someone who knows LPs – or expect a long and painful process. Especially in 2017 you better know some LPs if you want to raise a fund; there’s too much competition now.

You’ve raised two newer funds since. Was that a fundamentally different experience?

In 2014, we raised our second fund with pretty much the same set of LPs. It was $30 million, which was a frustratingly small increase. We thought we could get major LPs, but those relationships and our model required more time to get over the hurdle.

Our third fund took us from one institutional investor to over a dozen, raising $85 million. It took five years of building relationships and a track record. It’s not like raising money for a startup, which has a limited window. With a startup, VCs are in or out. If they wait a few extra months, they miss the boat. Most institutional LPs require GPs to show up at their office for several years in a row and keep the dialogues, progress, and updates going. Eventually the meetings start feeling more like, “The Bullpen team is here, good to see you again! I like when you visit.”

Have one last piece of advice for aspiring fund managers? 

Most LPs value brand over strategy. When we were raising our second fund, a potential LP said, “Tell me about your differentiators.” I talked about Bullpen’s post-seed model, which, to us, is the differentiator. “That’s nice,” he said, “but that’s not differentiation. How do you source deals? Who do you know? Who are you friends?” Basically, the question he was asking is, “How famous and connected are you?”

They prefer to work with sexy, famous GPs, but that doesn’t mean you can succeed without a differentiated model. Just be careful when an LP says the word “differentiation” as it might mean something very different to him or her than to you.

New Fundings

Amplitude, a five-year-old, San Francisco-based analytics company that helps teams better understand their user engagement, retention, and revenue, has raised $30 million in Series C funding led by Institutional Venture Partners, with participation from earlier backers Benchmark and Battery Ventures. The company has now raised $59 million altogether. TechCrunch has more here.

Big Squid, an eight-year-old, Salt Lake City, Ut.-based predictive analytics software company, has raised $6 million in Series A funding led by Signal Peak Ventures, with participation from Kickstart Seed FundMore here.

Brayola, a four-year-old, New York-based marketplace for branded women’s intimate apparel, has added $2.5 million to a Series A round that had previously closed with $2.5 million. The round, which now stands at $5 million, includes The Firstime Fund and numerous individual investors. TechCrunch has more here.

Chef’d, a four-year-old, El Segundo, Ca.-based meal-kit company, has raised $25 million in Series B funding from pork producer Smithfield Foods. Additionally, Campbell Soup contributed $10 million in the round (a deal that was announced in May), with the remaining $200,000 coming from online grocer Fresh Direct. CNBC has more here on why the company has skirted venture capital funding.

Flipkart, the 10-year-old, Bangalore-based online shopping giant, has raised an undisclosed amount of funding from Softbank’s Vision Fund, just a week after its deal to acquire Snapdeal (which is backed by Softbank) fell through. Though terms aren’t being disclosed, various reports say Vision Fund is buying both primary and secondary shares and that it may have invested upwards of $2.5 billion. The deal is being called the largest private investment in an India-based tech company to date. More here.

GawkBox, a year-old, Seattle-based company that provides monetization for live streamers and other content creators, has raised $3.7 million in Series A funding. Madrona Venture Group led the round, and was joined by investors London Venture Partners and Erlend Christofferson. VentureBeat has more here.

Glint, a 2.5-year-old, London-based still-stealth fintech startup that says it will give users more control in the way they store, spend, exchange and transfer money, and which is launching in the fourth quarter, has raised £3.1 million ($4 million). Investors include Bray Capital along with numerous individuals. TechCrunch has more here.

Netlify, a two-year-old, San Francisco-based startup that’s trying to make it easier than ever for programmers to build a static website, has raised $12 million in funding from Andreessen Horowitz. Business Insider has more here., an eight-year-old, New York City-based internet analytics platform, has raised $6.8 million in Series B funding. Grotech Ventures and Blumberg Capital led the round, with participation from Felton GroupFundersClub and DreamIt. VentureBeat has more here.

PCCW, a Hong Kong-based video and music streaming services company, has raised $110 million in funding co-led by Hony Capital (which recently backed WeWork’s China business), Foxconn Ventures and Temasek. PCCW Media, which is listed on the Hong Kong Stock Exchange, will retain its majority ownership stake in the spin-off. TechCrunch has more here.

New Funds

Betaworks Ventures, a $50 million seed and Series A stage fund, is sharing more information about where it’s shopping and who is involved. More here.


Another day, another tumble in Blue Apron shares. They fell as much as 19 percent after the company reported earnings for the first time earlier today. Bloomberg has more here.


After receiving a $15 million lifeline from investors last year, Birchbox has reportedly held acquisition talks with several retailers, including Walmart, says Recode. More here.

TeamSnap, an eight-year-old, Boulder, Co.-based integrated sports management software company, has acquired Korrio, an eight-year-old, Seattle-based cloud service for organizing and sharing youth sports. Financial terms weren’t disclosed. According to Crunchbase, Korrio had raised roughly $8 million, including from Ignition Partners. TeamSnap has meanwhile raised roughly $50 million, including from Foundry Group and Northgate Capital. The Denver Post has more here., a 14-year-old, Ontario-based voiceover marketplace that’s backed by Morgan Stanley Expansion Capital, is acquiring, a 19-year-old, Beverly Hills, Ca.-based site that hires celebrities for voiceovers. Financial terms weren’t disclosed. BetaKit has more here.


Brian Pinketon, the top technology exec at the Chan Zuckerberg Initiative, the philanthropic investment vehicle founded by Mark Zuckerberg and his wife Priscilla Chan, is leaving the organization after less than a year. More here.


The American Association of Collegiate Registrars and Admissions Officers surveyed over 250 American colleges and universities and found that 39 percent of Americans schools witnessed a decline in international applications in the last year.

Essential Reads

Tesla is working on self-driving technology specifically tied to its forthcoming electric semi-truck plans, says Reuters. The tech would allow the transport trucks to move in convoy formation with a lead vehicle providing guidance for autonomous follow trucks. (We’ll be talking about this at our September eventwith Alex Rodridgues, the cofounder and CEO of Embark, a young, self-driving truck company that’s on everyone’s radar.)

500 Startups continues to feel the impact of a sexual harassment scandal involving its co-founder and former managing partner Dave McClure. In May, the outfit announced a partnership in Australia with LaunchVic, a government-backed investing arm. Now, LaunchVic has terminated its partnership with the firm.

How Facebook squashes competition from startups.

Intel is building a fleet of more than 100 self-driving test cars starting later this year, but it plans to use them as a sales tool. More here.


A first look at the second season of “The Crown.”

The fascinating story behind America’s most expensive home (on the market now for $350 million).

The new way to tell your airline you hate it.

Retail Therapy

Shore House.

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