🦄 The DART Weekly #7 ~ VCs & Bridesmaids

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December 05, 2020

Entrepreneurship Chronicles

"The world didn’t need another smartphone brand in 2013. But we saw ways of doing things better and dreamt of shaking things up. Better products. Built hand in hand with our users. At a more reasonable prices". With these words, Carl Pei, cofounder of OnePlus, announced that he was leaving the company after 7 years (OnePlus Community).

The Chinese-born Swedish entrepreneur internet entrepreneur dropped out of his BSc in Economics at 22. Aged 24 he started working for Oppo as international marketing manager directly reporting to Pete Lau. There they saw the opportunity of making the best phone at the best price and founded OnePlus. They decided to sell their phones online through an invite system. It went viral. Aiming at selling 30,000 phones they sold more than 1 million. Today, OnePlus offers one of the best Android phones on the market.

Pei had little experience but he made up for it by working hard. After launching OnePlus 2, he asked Samsung to hire him as an intern to learn about logistics and operations (Carl Pei Blog). Now after having left the company he helped found (not for joining Samsung), Carl is in the process of starting his own venture (TechCrunch).

Ventures 101

👰-👰🤵-🤵 How to pick your Best Person/Bridesmaid

If cofounding a startup is like marriage, choosing the VC is like picking the Best Person/Bridesmaid. They counsel you through the ups and downs, while offering you a mortgage loan. You ought to choose them carefully.

Analyse the options

"All funds are equal." said no one ever. Let's see why that is.
Ticket and stage varies. Simply put, do not approach a later-stage fund if you are closing your seed stage.
Industry focus differs. Why would you reach out to an agritech fund to pitch your e-bike startup?
Firm dynamics are unique. Senior partners have the last word, junior partners are bolder and possibly more eager to support (Medium). Keep that in mind when you decide whom to approach.
Timing is key. Funds' 10-year lifetime makes it hard for a latecomer to be backed or to benefit from follow-up investments.
Ask the right questions (Forbes <- here they are).

Approach the candidates

If you are a first-time entrepreneur, chances are that you have a solid network, but not many investors in it. That should not scare you off: networks grow through referrals and via cold emails, albeit at a lower conversion. Gauge it carefully.
Time is limited. You might want to talk only to VCs that are the right fit. Efficient approach, but not particularly resilient. In particular seed-stage investing is more a matter of conviction than investment thesis (sifted), so accept unsolicited intro and speak to them all... on their own terms. The more the investors understand your business and engage in the conversation, the higher the chances you have to move forward in the funnel (sifted).
Arm yourself with a crisp investor deck, a great narrative and a huge amount of enthusiasm.

Facing rejection

Even if you do everything by the book, you are going to be rejected multiple times. Do not be surprised. VCs talk with hundreds of startups every year, but will only invest in a handful (Crunchbase). By definition their job is to say “No”, or better "Le me know how I can be helpful" (VC Starter Kit <- insightful and fun).
How should you react? First, do not be emotional about it. In spite of the effort you put in your startup, never stop assessing it in an objective way. Second, follow-up and thank them for their time and feedback. This will leave the door open for future opportunities. Finally, keep in touch with your VC contacts. The future is unknown and your interests might eventually converge.

Of Unicorns and Cowboys

🦄 The Rounds

The deals worth knowing in Europe and beyond - ordered from coolest to coolio

🇸🇪 Indebted: Voi has raised $160M. According to its CEO this is going to be its last equity round. The micro mobility startup "asset-backed" debt facility is poised to increase its debt-equity ratio.

🇮🇱 Hybrid: On the wake of Hopin et al. events platform Bizzabo raised $138M Series E funding. Operating since 2011, the startup supports remote and in-person event organizers in every steps of the way.

🌏 Verticalization: HungryPanda raised $70M. The food delivery startup serves Chinese consumers in 47 cities overseas. It comes only in Mandarin. It offers only chinese food.

🇪🇸 Recipe: Valencia-based Jeff raised $21M ahead of its US launch. The startup helps entrepreneurs launch brick and mortar businesses across four verticals: laundrettes, fitness clubs, beauty salons and massage studios.

🌈 The Pots

The exits you should follow in Europe and beyond - IPO, direct listing, SPAC, bankruptcy ... all awesome stuff

🇬🇧 B2Bing: Konsumer is Facebook's latest acquisition. Valued $1B, the UK-startup provides better historical data of customers and access to omnichannel communication. Ideal for FB e-commerce plan.

🇺🇸 Synergies: MS Teams ain't a problem no more. Almost. Slack is getting acquired by Salesforce valued at $27.7B.

🇨🇳 Suiting: Amazon has Pharmacy. Chinese e-commerce JD.com has JD Health... like many others. The company raised $3.48B in Hong Kong biggest IPO in 2020.

🇺🇸 Blitz: US leader in food delivery DoorDash is prepping for its IPO. With more than $2B in revenues in 2020, it plans to raise $2.8B at a $32B valuation.

🤠 The Funds

The tales of unicorns' hunters you should know about - particularly relevant if you are a founder looking for backing

🇪🇺 Pan-European: Target Capital closed its fifth fund at €300M. Focused on Berlin, but with an eye on emerging European markets, it will continue investing in fintech, SaaS and wellness startups.

🇬🇧 Cherry-picked: Firstminute Capital launched $111M Fund II. Its LPs are all serial entrepreneurs and founders of unicorns. Why? Coz they know the drill and have a great professional network to exploit.

🇺🇸 No debate: San Francisco-based Bling Capital just raised $113M across two new funds. It operates as solo GP fund enabling it to take fast decisions on deals.

🧑‍🎤 ... and The Quirky Ones

The crazy stuff we gossip about while sipping our chai latte - it's like others, but better

🇬🇧 Anti-NASDAQ: UK is in the process of revisiting its IPO rules in order to increase its appeal after Brexit. What to expect? Allowance of dual-class share structures and free float.

🇨🇭 Pleasing: Remember Facebook's Libra Association? It's Diem now. Its wallet Calibra? Ehm, you mean Novi. Is the global stablecoin still a thing? Nah, several stable coins pegged to fiat currencies.

🇸🇪 Lagom: Yet another big move of SoftBank that invested $690M in cloud-based customer engagement Sinch. Many big players are trying to get a hold of CRM companies.

🇬🇧 Matching: Venture capital supercharged, or Floww. The London startup operates a platform where fundraising startups are showcased and rated on merit and where VCs manage their deal flow.

🇺🇸 Educational: One mission: improving financial literacy among Gen Z. $50M Series B. 2-month old product. Many high profile investors, one above all: TikTok star Charlie D'Amelio. Well done Step.
🌌 Wanna know more about the social and economic factors driving huge transformations in finance, startups, government regulations and economic policy? Take a look at the weekly newsletter by our friends at Reshaped!

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