IDC recently published a report on global smartphone market share. A few highlights from my perspective.
As you may know, there is tension between investors and entrepreneurs in general. There is a long history of bad blood and poor actions on both sides that I won’t get into right now.
During my time as an investor, I have found that the easiest way for an entrepreneur who has raised money from me to build trust, is to over communicate the health/status of their company.
As a very active seed investor, we typically don’t have a lot history with the founder(s) and usually invest after a few meetings, so while there is some trust built during the investment process, you still don’t really know each other that well. So trust (on both sides) is built over time.
If you have taken money from investors, I encourage you send monthly updates to them. I have created an easy template to follow. The information that I ask for (and that investors want) is something that you should be tracking and sharing within your respective organizations in any case, so it is not onerous.
The side benefit to the entrepreneur to send monthly updates is that your investors/angels will bug you less often as they already know how things are going, so it allows you more time to focus on your business and less time doing coffee meetings with all your investors.
The other benefit is that when you need to raise that bridge/extension round (which is highly likely), you have built trust with your investor(s), so you have a better shot of raising that inside round. I have seen several situations where I don’t receive any information from an entrepreneur for six months (or more) and then they come to me saying things aren’t going well, please invest more money, that is not a good situation to be in as an entrepreneur.
NYC accelerators:
So AngelPad (a SF based accelerator) just announced at the #premoney conference that they are expanding to NYC. There are now 15 equity based accelerators in NYC.
If you are SELLING a product/service, there isn’t a better place than New York.
Largest density of Fortune 500 companies is New York City.
In Manhattan alone, there are 42 Fortune 500 companies, see pic. (all of those are within 5 miles of each other)
In addition, there is a high concentration of universities, K-12 schools, hospitals, physicians, financial services firms, real estate related firms, construction projects, local retailers and there are 8.3M people.
If you can’t find customers in NYC, you won’t have a better chance in any other region.
Startups, no excuses of why you can’t close a lot of business in this town.
If you have raised funding from investors, you should be providing at least quarterly updates, although I much prefer monthly updates. Here is what I want to see from Founders:
Keep it succinct, you should be able to keep it to one page in length.
If you have been following the activity in NYC, you have a sense of the grassroots movement of fixing the problem of the lack of tech talent in the city but also globally.
The NYC community continues to impress me on how it has taken challenges head on and does its best to address them. Similar to other active startup communities, there is a lack of quality engineering talent in NYC.
The following NYC based organizations are DOING something to fix this problem, many of them are focused globally, not just NYC.
General Assembly – a global network of campuses for technology, business and design.
Girls Who Code – a new organization working to educate, inspire and equip 13- to 17-year-old girls with the skills and resources to pursue opportunities in technology and engineering.
Codecademy – the easiest way to learn to code. It’s interactive, fun, and you can do it with your friends.
Flatiron School – school for passionate people who want to love what they do. Students learn how to build awesome things with code.
SkillShare – a community marketplace for classes
Turing Fellows – matches top computer science students with outstanding summer internships at leading NYC Startups
hackNY – aims to federate the next generation of hackers for the New York innovation economy
Cornell / Technion Campus – educate the next generation of leaders who will advance technology, generate cutting-edge research that addresses critical issues
Academy For Software Education – a high school that provides innovative software engineering and computer science skills and knowledge
Enstitute – 2 year apprenticeship program for people who want to get into the startup sector
Startup Institue – an eight week program to train and place professionals in the startup sector
I genuinely believe that within the next five years, NYC can leapfrog both the Bay Area and Boston when it comes to having the best software engineers.
I had a brief twitter chat with two active people in the NYC tech ecosystem, but wanted to further clarify my perspective in a blog post.
As a prelude, this post is not a reflection as to which company is better or which specific community is better but an example of how two separate exits can have a distinct impact on their respective tech communities.
Both Instagram and Indeed ($1.1B) were amazing exits for the Founders and early investors. That being said, the Indeed exit is much better for a tech ecosystem than the Instagram exit. Here are a few reasons why.
As a last point that is not as relevant to which is better exit for a tech community, Indeed took nearly eight years to build, scale and sale their company. Instagram was built, scaled and sold in two years. Startup Founders need to understand that building a valuable company takes a lot of time, like an Indeed and not an Instagram.
I continue to have conversations with people who are not based in NYC and they are always surprised to hear that the NYC startup scene has startups in various sub-sectors. When people think of NYC startups, they typically think of AdTech or Digital Media or Commerce. As you can see below, there are many sub-sectors that NYC startups are gravitating to.
The list is not meant to be comprehensive as there are at least 1000 startups in NYC, wanted to provide enough examples of companies in their respective sub-sectors.
AdTech: Appnexus, Collective, DoubleVerify, Indeed, Yodle, Yext, AdSafe
Digital Media: Buzzfeed, Comixology, Everyday Health, Tumblr, Say Media, Aereo
Commerce: Birchbox, Bonobos, Etsy, Fab, Gilt, Warby Parker, Ideeli
EdTech: 2tor, General Assembly, SkillShare, Codecademy, Knewton, Mindsnacks, Flat World Knowledge, Socratic Labs (accelerator)
FinTech: Kickstarter, BillGuard, Zipmark, CB Insights, Learnvest, SecondMarket, OnDeck Capital, FinTech Innovation Labs (accelerator)
Infrastructure: 10gen, Nodejitsu, Appfirst, Neverware, Datadog
Enterprise: SailThru, Enterproid, Lua, FiftyOne, Movable Ink, FieldLens, Group Commerce, NYC Seed Start (accelerator)
Big Data: Bit.ly, Yipit, Chartbeat
Social: Buddy Media, Offerpop, Crowdtwist, 33Across, Thumb, Foursquare
Hardware: Boxee, Shapeways, Makerbot, Quirky, LittleBits
Health/Wellness: Fitocracy, Zeel, ZocDoc, DailyFeats, Force Therapeutics, BluePrint Health (accelerator), New York Digital Health Accelerator
Energy: Anellotech, Radiator Labs, Enertiv, NYC ACRE (accelerator)
I wanted to understand who the most active seed investors are and which syndicates were the most prominent. For the purpose of this report, the search criteria were:
The research yielded interesting results. The most active investors over the time period were SV Angel and Lerer Ventures, each with a total of 17 investments. The other most active firms were RRE Ventures and Founder Collective with 15 while First Round Capital had 14.
The most active investment syndicate was SV Angel & Lerer Ventures with 9 co-investments. This is not a surprise as it was mentioned in May 2011, that the two firms would work together closely. Next was SV Angel & Founder Collective with a total of 7 co-investments followed by Lerer Ventures & Thrive Capital with 5.
When you see firms syndicating frequently, it could suggest that the firms know each other well and/or have similar investment themes; As an entrepreneur raising a seed round, knowing this information can be very helpful.
The two diagrams below help to illustrate the findings. The first is a venn diagram attempting to show some of the major investment connections while the second diagram gives a more complete view of the connections between the different firms. In each diagram, the total number of investments made by that firm is in parentheses next to their names.
All of data used for the diagrams below were from sources available to the public. The vast majority of the data was sourced from CB Insights (a NYC startup). Some of the rounds of financing are not disclosed or file State documents, so these diagrams don’t represent 100% of all financings using the criteria mentioned above.
Thank you to our Intern, Jacob Laufer, for compiling the data and putting together the diagrams.
I’m really excited to announce the list of speakers that are going to be a part of the SVB CEO Summit on April 27th in NYC. This is an invite-only event, reserved exclusively for Founders of bootstrapped and seed funded startups who are clients of SVB (Silicon Valley Bank). As you know, many of the conferences in the tech ecosystem cost hundreds, if not, thousands of dollars to attend. This is a unique event that is free and our clients will be able to connect with Founders who have exited at least one startup in the past. If you are are a Founder of a startup that is a client of SVB and interested in attending, please send me an email (sgoldman at svb dot com), we have a few seats available. The folks below are pretty awesome and looking forward to hearing insights about how they scaled their startups and understand what challenges they overcame.
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