• Cognoa, Which Promises Parents Faster Answers, Looks to Series B

    There’s a lot of talk these days about computational medicine, which uses massive amounts of data to train a machine to understand even more than experts or, at least, to identify health-related problems more quickly.

    Cognoa, a consumer-focused healthcare outfit, is among the developing field’s biggest proponents. The two-year-old, Palo Alto, Ca.-based company claims it can dramatically speed up the time that it takes parents to identity whether their child has developmental issues, and it can do so by assessing far fewer data points than have been traditionally employed toward the same end.

    The company’s story centers on the work of Dennis Wall, an associate professor of pediatrics and psychiatry at Stanford who began looking into the complexity of diagnosing Autism while an associate professor of pathology at Harvard several years ago. Specifically, he learned that the process of better understanding whether a child’s development is on track typically means hours of behavioral examinations by certified practitioners who’ve been trained to perform interview-based analyses with parents or with children directly.

    As you might imagine, appointments are hard to get as a result. In fact, the process is so slow, says Wall, that the average age of a child being seen by one of these practitioners is 4.5 years old. That’s not good. By that age, a kid has missed a window of brain plasticity when an intervention can have the biggest impact.

    Work by researchers at The New England Center for Children — which studied 83 toddlers diagnosed with autism in the school’s Early Intensive Behavioral Intervention program — underscores the problem. According to their findings, there’s an alarming gulf between the impact that 20 to 30 hours of weekly one-on-one therapy can have on a child who’s under age 2 and one who is 2.5 years old or older. While fully 90 percent of the toddlers in their study aged 2 or younger made “significant gains” in social and communication skills, just 30 percent of children who entered therapy at age 2.5 or older made “significant gains.”

    Cognoa says it can get children in front of doctors faster with its deceptively simple app, one that asks parents to answer 15 questions that address a minimum viable set of behaviors that indicate whether their child is at risk of Autism.

    How can it boil down the process so drastically? The company says much of its power is rooted in the information that Wall has culled over the years, including from research repositories like the Autism Genetic Research Exchange, Cure Autism Now (later subsumed into Autism Speaks), the Autism Consortium, and the National Database for Autism Research, which is funded by the National Institutes of Health.

    Collectively, the repositories feature observations about 10,000 children. It’s always been possible to request access to that information, says Wall, but he claims no one before had tried to combine, synthesize, and analyze the data using machine learning.

    More here.

  • VCs Aren’t the Only Ones Watching Those Mutual Fund Markdowns

    sec-sealVCs have been watching with great interest as mutual funds mark down the value of some of their privately held, illiquid investments, including shares of Dropbox, Zenefits, and Snapchat. Turns out the SEC is watching, too. A new Wall Street Journal report says the agency “has been asking more questions of large fund firms about how they value startups and whether their process ensures an accurate estimate of a company’s worth.”

    According to the WSJ, examiners from the agency’s enforcement division are not yet involved in the inquiries. And asked yesterday if the SEC is investigating mutual funds’ pricing of private companies, a spokeswoman responded to us this morning, saying the agency isn’t commenting on its plans.

    But some think it’s only a matter of time before a full-fledged investigation is launched into possible violations of federal securities laws, given the difference in prices that some funds have assigned their holdings, how they’ve timed their markdowns, and the opaqueness around both. The whole matter may give pause to other investors who’ve been looking to access the private markets, too.

    More here.

  • Brooklyn Bridge Ventures Nears a Close on Fund Two

    1977656_74228156_3499416-jpgBrooklyn Bridge Ventures, a three-year-old, seed-stage venture firm led by its founder and sole general partner, Charlie O’Donnell, is about to close its second fund with $15 million, up from an $8.3 million debut fund closed last year.

    It’s a meaningful milestone for O’Donnell, who got his start in venture capital as an analyst at Union Square Ventures and later worked as a principal with First Round Capital before striking out on his own in late 2011.

    Last week, we sat down with him in San Francisco to talk about what the fundraising process has been like. We also chatted about his current portfolio, whether Silicon Valley VCs are paying as much attention to New York as they have in recent years, and why he’ll (probably) never be more than a one-man show.

    You’re just finishing up your first fund. How many companies did you wind up backing and what was your average check size?

    We funded 33 deals and the average check size was between $200,000 and $250,000.

    Given its size, were you able to make any follow-on investments?

    I don’t care about that stuff. I’m getting in so early [that] my average pre-money valuation is $4 million. If you sell a company for $250 million and you got in at $4 million and your fund is only $8 million, the multiple is so high and the base is so low that you return your fund on just two or three of those deals.

    At $8 million, you basically need to create a billion dollars in total enterprise value across 33 companies. It’s hard work, but you don’t have to suspend reality to imagine that a few portfolio companies might exit [in acquisitions totaling around] $250 million. You get four or five [additional] $50 million [exits], and a couple of singles and doubles where you get your money back, and it’s a 3x fund, even if the other 17 investments go to zero.

    More here.

  • Fiverr CEO On Raising $60 Million In New Capital: “It’s a Land Grab”

    a0d31ca1b9294d55b02e7b58f56b8fbdThis week, Fiverr, an online market for small services, announced $60 million in new financing led by Square Peg Capital. Earlier backers Bessemer Venture Partners, Accel Partners and Qumra Capital also chipped into the round, which brings the company’s total funding to a pretty significant $110 million.

    We talked with founder and CEO Micha Kaufman about what those investors are backing exactly, how and why five-year-old Fiverr just changed its pricing structure, and whether an IPO is in its sights yet. Our chat has been edited for length.

    First, how big is the company at this point? Give us some stats.

    We have more than 200 people in five offices, including here in Tel Aviv, New York, Chicago, Miami, and San Francisco. Fiverr generates close to 1 million transactions a month, and we’re truly an e-commerce company, as opposed to a labor marketplace. It’s a catalog business.

    Your Chicago office came together through an acqui-hire of a small design house called Cuban Council, from which Google also did some recruiting.

    Yes, part of the business was acquired by Google, and we took one of their founders and a few of their team and started our own studio of gifted designers.

    With $60 million in the bank, are more, bigger, acquisitions on the horizon? There are a whole lot of companies catering to freelancers at this point.

    Doing acquisitions is one way to accelerate our growth, and there are vertical businesses that might help us gain market share in particular categories or with our core business of e-commerce and recommendation systems and so forth, so that’s definitely on our radar.

    On a macro level, I do think we’ll see something similar to what’s gone on with e-commerce, where some startups break apart, then the market starts to consolidate through M&A and companies starting to wind down. But 97 percent of freelancing is still happening offline. A small minority happens online. So this is still not a very mature market where you need to aggressively compete against someone to gain market share. It’s more of a land grab right now, and the opportunity is immense.

    More here.

  • AngelPad Shows Off 13 New Companies

    IMG_1640AngelPad, a five-year-old incubator that twice a year chooses roughly a dozen startups to coach over a three-month period, held its ninth “demo day” yesterday in San Francisco. As has become routine, its founders presented to a densely packed audience of invite-only guests.

    We weren’t surprised, walking onto the crowded scene. At this point, Angelpad, founded by husband-and-wife team Thomas Korte and Carine Magescas, has earned a solid reputation for finding interesting new entrepreneurs. (MoPub and Crittercism are two of its better-known discoveries.)

    The outfit — which provides each company with a $55,000 convertible note and an addition $4,000 per founder in exchange for 7 percent of their startup — also seems to be attracting more sophisticated entrepreneurs. That, or else Korte and Magescas are getting better at identifying talent. As Magescas told us, while companies are “usually just getting off the ground here,” Angelpad’s current batch of 13 companies “has an enormous amount of traction already,” to the tune of $2.5 million in combined revenue. “That’s not intentional,” she says. “Some are just [taking off] earlier than we thought.”

    Continue reading for an overview of the presenting companies.

  • Diamonds Born in California

    A maxresdefault (1)Santa Clara, Ca.-based company called Diamond Foundry is this morning taking the wraps off what it’s been creating over the last three years: the ability to produce diamonds. In Santa Clara.

    As the company explains it, it discovered a plasma that allows atoms to attach themselves to a thin slice of diamond that’s been extracted the old-fashioned way, by being plucked from the earth. One by one, it says, atoms stack atop the diamond’s crystal structure, growing layer by later into a “pure, cultured jewelry-grade diamond.”

    We couldn’t catch CEO Martin Roscheisen on the phone yesterday to ask what, precisely, jewelry-grade diamonds mean. We’re guessing if they were colorless and had what gemologists refer to as “excellent clarity,” Diamond Foundry would say so in its marketing materials. (It does not.)

    Either way, the gems seem to be good enough for a list of prominent list of investors who’ve plugged some of their capital into the company. Diamond Foundry’s backers include entrepreneurs Mark and Alison Pincus; serial entrepreneur Ev Williams; early Facebook COO Owen Van Natta; and actor Leo DiCaprio, who famously played a mercenary gem smuggler in the 2006 film “Blood Diamond.”

    More here.

  • Rich Miner of Google Ventures on the Alphabet Factor and More

    rich-miner-1Yesterday, at a conference in San Francisco, we sat down with Rich Miner, a serial entrepreneur who may be best-known for cofounding a company called Android, which was acquired by Google a decade ago and then relegated to the dustbin of history. (Kidding!)

    Four-and-a half years later, Miner joined Google Ventures and he continues to work from Cambridge, Ma., making investments on behalf of his new parent company, Alphabet.

    We talked with Miner about how that reorganization is impacting Google Ventures, the team’s lack of gender diversity, and why Miner is expecting the stylus to become a bigger part of our lives. More from our chat, edited for length, follows.

    To some Google Ventures, remains a bit of an enigma. For example, with offices in Cambridge, the Bay Area and London, do partners invest pretty exclusively in their own backyards?

    I live in Boston, so I like to see all the Boston deal flow. But I also sit on the board of several companies in the Bay Area and if it’s something domain specific to mobile and doesn’t happen to be in Boston, I’m certainly going to look at that deal.

    What’s happening with the London team? There was a lot of press about it being slow to make investments at first.

    Google Ventures is very much not a strategic venture fund. We’re focused on returns. To that point, there was a time where there were investment dollars in Europe but [European startups] trailed behind the U.S. in terms of returns, and we’ve clearly started to see a shift. You now have enough of a history of successful startups, enough capital, and great hotbeds of innovation, including around Berlin, and London and Stockholm, that we think all the right components are in place.

    They have separate capital, too, right? The U.S.-based team has $300 million to invest annually and Europe gets its own $125 million annually?

    Correct, the European team has the same sort of structure with annual funds and right now, the European fund is a separate fund.
    With Alphabet becoming a giant parent above Google, do those budgets change?

    More here.

  • In India, a Founder Detained for Days by Axed Employees, and Police

    Screen Shot 2015-11-05 at 1.56.56 PMWell that was . . . different.

    Last night, one of six cofounders of TinyOwl, a two-year-old, Mumbai, India-based food ordering software startup, was released after reportedly being held captive for two days by disgruntled former employees at the company’s office in Pune.

    TinyOwl had earlier this week announced $7.67 million in fresh funding from earlier backers Matrix Partners and Sequoia Capital. But the funding came with the understanding that TinyOwl would follow through on a major restructuring to control its burn rate.

    Part of those changes, reported the Economic Times, involved moving TinyOwl’s order processing to a third party app. According to Media Nama, they also included plans to lay off 112 sales employees across India in a second massive round of layoffs. (In September, reportedly, the company had separately laid off100 employees.)

    As part of that restructuring plan, the company is shutting down its operations in four cities, including Pune. Which leads us to what happened to company cofounder Gaurav Choudhary.

    Choudhary had traveled to Pune earlier this week to oversee the office’s closure, while his fellow cofounders – all of whom are graduates of IIT Bombay — traveled to sites in Gurgaon, Chennai and Hyderabad to do the same.

    More here.

  • Marc Andreessen and Sheryl Sandberg: Tech Isn’t Driving Income Inequality

    f370a66a4f27488ea77c6ee1ec4234f5Yesterday morning at Fortune’s Global Forum conference in San Francisco, Fortune interviewer Alan Murray got quite an earful from the guests on his panel: Facebook COO Sheryl Sandberg, and venture capitalist and Facebook board member Marc Andreessen, who pushed back hard on the notion that technology is exacerbating income inequality.

    It was a riveting chat that touched on what’s next in mobile, whether Facebook might restructure itself a la Alphabet, and why Andreessen has seemingly been promoting Facebook competitor Twitter by spending so much time publishing to the platform. Some highlights follow.

    On the changes brought by mobile. . .

    For his part, Andreessen talked at some length about the “smart phone wars,” and the fact that “gigantic manufacturing capacity is being built up worldwide” – from screens to chips to batteries – which has driven down the cost of making smart phones to $25.

    That’s great for smartphone customers, of course, but it’s also great for investors, he suggested. The reason: The same components are now used to help produce electric cars, drones, virtual reality hardware and connected toys, among other things. There are “thousands of categories that weren’t possible before that will use smart phone components,” he said.

    More here.

    Featured image: Eric Risberg/AP

  • Blind, An Anonymous Chat App for Employees, Raises Series A Funding from DCM

    Screen Shot 2015-10-30 at 8.34.11 AMTired of being monitored by your company while wanting to dish with colleagues about said company? Or maybe you’re curious about what people with similar work experience are making at other companies? Blind, a two-year-old app founded in South Korea and newly available in the U.S., may be just the thing for you.

    Its big idea: bringing anonymity to the workplace so you can “share the real you” with other employees. If you happen to figure out what’s really happening in the upper echelons of the company, so much the better.

    Blind’s origins trace back to Naver, the South Korean Internet giant, which long ran a widely used employee forum but pulled the plug when employees began making less-than-flattering remarks about management. When a group of Naver employees left to form Blind, many Naver employees embraced the platform, followed by employees elsewhere.

    It’s been growing ever since, says Osuke Honda, a general partner at DCM, which led an unannounced Series A round of “single digit millions” in the company in May. Indeed, he says that another pivotal moment for Blind came late last year, when a senior Korean Air executive exploded in a rage after a flight attendant presented her peanuts in a bag instead of on a dish.

    More here.

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