Precursor Ventures, a 3.5-year-old, seed-stage investment firm in San Francisco, just closed its second fund with $31 million in capital commitments, roughly double what it raised for its debut effort in 2017.
Somewhat amazingly, it has 75 portfolio companies to show from that first fund, and many more that it has been quietly funding with the second. Not only does it show how far smaller pools of capital can go, but Precursor is run by a single general partner, longtime VC Charles Hudson, formerly of Uncork Capital. He has help from senior associate Sydney Thomson and, more newly, an analyst, Ayanna Kerrison, but it’s still lot to manage.
How does he do it, and how can he identify breakout companies when he’s moving as quickly as he does? We talked with him earlier today to get an update on the firm, which is focused in part on funding women and other underserved minorities but is more broadly seeking out burgeoning marketplaces and people “who have fundamental insights that are likely to be true for five to seven years,” no matter whether or not they have founded a company previously, says Hudson.
More from our chat below.
TC: Like a lot of fund managers, the money for your first fund came mostly from family offices. This time, you say it’s more institutional money. But isn’t it challenging for big institutional investors to write smaller checks for a fund of Precursor’s size?
CH: It is still hard. We definitely have a more concentrated [investor] base. But I think people who last time around didn’t necessarily believe in pre-seed deals, who thought that it felt like adverse selection and involved too many companies and too little ownership, have changed their thinking. Now, most realize that seed investing is a continuum, as [fellow investor] Hunter Walk likes to say. They see the value of being the first money into a startup.
TC: For your first fund, you were writing initial checks of $150,000, then raising special purpose vehicles to support some of your breakout companies. Were you using AngelList syndicates to do this?
CH: Yes, we write a small check and if we’re fortunate, we get pro rata allocation and we’ll use SPVs, some on AngelList, some [not involving AngelList]. We did 14 SPVs altogether for fund one and they’ve been a great way for us to maintain relationships with companies beyond even their Series A round.
TC: You’re often funding people who’ve never started a company before. From where is your deal flow coming?
CH: We were the first investor in the [subscription-based sports website] The Athletic because I was introduced to the founders through a founder who I knew from Uncork. Juniper Square [which makes investment management software] I met through AngelList folks and some other people who I know. Carrot Fertility [which enables employers to offer fertility benefits] I think I met through [Evernote founder turned investor] Phil Libin.
We also have almost 300 founders in our portfolio across companies we’ve backed, and they do a tremendous job of referring people. And we try to be a good partner to seed-stage firms so that when they see startups that [are too early for them] they’ll send the founders our way.
There’s a small sliver of entrepreneurs who can walk into an Uncork or Freestyle or First Round with little more than an idea and raise money. Those people totally exist. It’s a small fraction of the population, though. I think the majority of founders we meet are coming out of another company or experience, they aren’t super famous yet, but they’re totally qualified and have a good idea and need $500 million to $1 million to make enough progress for the bigger seed funds to pay attention, and someone has to fill the gap.
TC: You aren’t the only fund backing these types of startups. In fact, most of your deals are co-investments. But you’re maybe better known in this world. Does that help in terms of securing a meaningful ownership stake? Do you have a specific target when you’re writing a check?
CH: My view is that you want enough ownership that the model works. We could probably be more punitive if we wanted — the air is pretty thin in pre-seed — but with a $30 million fund, ownership of 5 percent is plenty. We’re sensitive to the dynamics of seed funding, wherein seed investors want [a bigger ownership percentage]; if we’re taking 10 percent and they’re taking another 25 percent, that’s already well above the ownership level that a founder should [be left with].
TC: What was the math that you pitched to your investors?
CH: Basically, I didn’t want us to be a fund where we need multibillion-dollar outcomes. Getting to a billion-dollar valuation is a big accomplishment. I think we’ve gotten numb to it, but it’s still a really hard thing to do. If you get [at an exit at that level], it should return your fund, or multiples of it. For us, though, if we have a company that sells for $500 million and we own 3 percent of it, we’re fine.
Our enemy is dilution. If our 5 percent stake ends up being where we exit, or it goes to 3 percent, we’re okay. If it goes to 1 percent, it’s unlikely that that exit is going to be material. [Working in our favor], we like capital efficient businesses [versus] the companies getting written up for raising large amounts of money [and often diluting earlier investors in the process].
TC: At the outset of Precursor, you’d said that backing women and minorities was going to be among your priorities. How would you score the firm on this front so far?
CH: We’ve made a lot of investments already and we’re doing better on gender dynamics than in fund one. Across the entire population of our second fund, 56 percent of portfolio companies have a female founder on the team and 51 percent of the CEOs are female. As for people of color, 17 percent our founders are either black or Latinx and if you add Asian founders into the mix, that percentage goes way higher.
TC: Do you feel like progress is being made, in terms of underserved populations being better able to access capital?
CH: I’m probably more concerned than I’ve ever been. I think that increased awareness about the issues that particularly black women face has not translated into them receiving more money. In talking with black female founders, I don’t get the feeling that their experience is improving, even while there are more of them, and they are stronger founders with more traction than we saw before.
TC: What are you looking for, exactly, in a founding team?
CH: I don’t care that much about traction. That’s not an important input in our model. Most companies are between five and 12 months away from a public launch, where their product can be evaluated and assessed. So the founders’ insights have to be sufficiently durable that their ideas will be true in a year and where a million dollars can get them from a lack of evidence to an indication that they’re on to something.
TC: Are you funding people who come out of industry and so know what their industries’ pain points are?
CH: Sometimes, or sometimes they’ve encountered a problem in their life that needs to be solved and is adjacent to the work they do.
TC: And how do you keep tabs on all of these companies?
CH: We probably spend the most amount of time internally on our own systems and processes that we use to keep track of portfolio companies, though at this stage, there’s no substitute for spending time with them, so half of my day each day is spent with companies that we’ve already backed.
TC: Do they also give you monthly or quarterly updates?
CH: We work out a cadence, whether it’s monthly meetings in person or over video or via something written. We don’t prescribe the form, but we say, ‘It’s worthwhile for you to report once a month so, so you can get our input.’
I find the founders who share the most information get more value out of us. Some don’t, though, and there’s only so much we’re going to impose on them.
TC: What about conflicts of interest? Given how nascent these startups are and how fast you are writing checks, are you dealing with startups that potentially compete with one another?
CH: We say no to a lot of interesting opportunities because I don’t [want to be in that position].
Source: TechCrunch
Volkswagen has added another member to its ever-expanding I.D. line of concept electric vehicles that’s meant to showcase the automaker’s electric future. This time it’s the I.D. Buggy, an all-electric dune buggy with some 1960s California subculture flair.
The I.D. Buggy, which made its global debut Monday at the 89th Geneva International Motor Show, is meant to show the versatility of the automaker’s modular electric drive toolkit chassis, or MEB. The MEB, which was introduced in 2016, is a flexible modular system — really a matrix of common parts — for producing electric vehicles that VW says make it more efficient and cost-effective.
For instance, the two-seater buggy can be converted to a 2+2-seater and an additional electric motor can be added to the front axle in order to make four-wheel drive possible, the company said. The modular design allows for the composite upper body to be detached from the MEB chassis, which VW argues will open up a “world of possibilities for third-party manufacturers, as the original Meyers Manx kit did for the first buggies.” The Meyers Manx kit was the creation of California engineer, boat builder and surfer Bruce Meyers who modified the original Volkswagen Beetle to make it suitable for desert racing.
The I.D. Buggy is equipped with a a 62kWh lithium-ion battery and a 201-horsepower electric motor in the rear to give it an expected range of 155 miles on the WLTP cycle, the company said. There are no doors or a roof in the two-seater, which VW says gives drivers the “purest experience of classic beach cruising.”
The vehicle has three-dimensional oval LED headlights and taillights and an LED VW logo. The automaker also touts the buggy’s body that seems to “float above the chassis,” an effect achieved by how its painted.
Volkswagen has been showing off its I.D. line of concept electric vehicles for several years now. And some of them are even going into production. There is the electric all-wheel drive microbus called I.D. Buzz, a futuristic take on the family camper van that VW introduced as a concept in 2017, the I.D. Vizzion self-driving sedan concept, and of course, the I.D. Crozz SUV concept that was first shown at the North American International Auto Show last year.
The I.D. Crozz and I.D. Buzz are going into production. It’s not clear if the I.D. Buggy will ever be anything more than concept.
Earlier this year, VW announced plans to spend $800 million to expand a U.S. factory in Chattanooga, Tenn., that will produce the automaker’s next generation of electric vehicles.
VW’s Chattanooga expansion is just a piece of the automaker’s broader plan to move away from diesel in the wake of the emissions cheating scandal that erupted in 2015. The company is also building a European facility in Zwickau, Germany, set to begin EV production in 2019 and adding EV-production at facilities in Anting and Foshan, in China, in 2020, and in the German cities of Emden and Hanover by 2022.
The Tennessee factory (along with the other new facilities) will produce EVs using Volkswagen’s MEB chassis. Volkswagen of America says it will offer the first EV based on the MEB platform to customers in 2020. Electric vehicle production at the Tennessee site will begin in 2022.
Source: TechCrunch
Getting your business off the ground is hard enough, and dealing with viruses, hackers, and security breaches only makes it harder. These 5 antivirus solutions can help keep you protected.
The post Here are the 5 of the best antivirus solutions for your small business appeared first on Digital Trends.
Source: Digital trends
Netflix did pretty well at this year’s Academy Awards, but it’s also facing pushback from some big names in the movie business.
“Roma” took home more high-profile Oscars (Best Director, Best Foreign Language Film and Best Cinematography) than any Netflix or streaming original before it. But it lost out to “Green Book” for Best Picture, a race where its association with Netflix may have hurt its chances — though it faced other obstacles, like the fact that the Academy has never given Best Picture to a foreign language film.
Now director Steven Spielberg is reportedly preparing to speak out against Netflix at the next meeting of the Academy’s Board of Governors.
It’s not entirely clear what Spielberg is proposing — the story in Variety said it was “unclear what specific rule changes he would advocate for,” while a more recent Hollywood Reporter piece suggests that he’s suggesting that movies be required to play exclusively in theaters for at least four weeks to be eligible for an Oscar.
Whatever the specifics of his plan, Spielberg has been open about his feelings on Netflix and awards before, arguing in an interview last year that Netflix original films were “TV movies” that should be up for Emmys, not Oscars.
The news has, perhaps inevitably, led to debate about Netflix’s impact on the movie business — for some, it’s time to trot out the “old man yells at cloud” meme, which in turn has prompted others to criticize the streaming company’s lackluster selection of movies (particularly older films), plus its resistance to putting its movies in theaters before they go live on Netflix.
Clearly, the discussion has gone beyond the Oscars themselves, tapping into broader anxiety about the threat that Netflix and streaming poses to the theatrical model. It’s the same anxiety that prompted the Cannes Film Festival to announce a rule that prevented Netflix films from competing (a rule the festival may be reconsidering), and that led the major theater chains to refuse to show “Roma,” even after it was nominated for 10 Oscars.
The debate has gotten Netflix’s attention too, with a tweet yesterday declaring, “We love cinema.” It goes on to argue that the service brings movies to people who can’t afford or don’t have access to movie theaters, gives everyone access to movies at the same time and gives filmmakers “more ways to share art.”
“Netflix, good or bad for the movies?” is an argument that isn’t going away anytime soon, and it’s far beyond the scope of this article to settle it.
I will say this, though: I’m glad Netflix financed “Roma,” but I’m also glad Netflix backed down from its initial, hard-line stance on theatrical releases — if only because I’ve seen “Roma” on the big screen, and that’s how it deserves to be watched.
I’m certainly glad that Netflix has helped movies like “Roma,” “The Ballad of Buster Scruggs,” “To All The Boys I’ve Loved Before,” “The Meyerowitz Stories” and “Okja” get made. But if a little Spielbergian pressure means that the company gets more serious about releasing its movies in theaters, even better.
Source: TechCrunch
Médicos de Nueva York (EE. UU.) van a probar un tratamiento basado en la administración de virus con la variante genética ApoE2, que reduce el riesgo de sufrir la enfermedad de Alzheimer, en el cerebro de aquellas personas con más posibilidades de padecerla. Si el ensayo es un éxito, abrirá una puerta a la prevención
Source: MIT
No siempre es necesario utilizar tecnología punta para resolver los problemas. Un sistema de riego que funciona con energía solar, un dispositivo portátil para la detección de la malaria o un microscopio hecho de papel pueden ayudar a millones de personas en los países menos desarrollados
Source: MIT
Rocket Lawyer es una de las compañías que pretenden utilizar ‘blockchain’ para realizar un seguimiento de los derechos y obligaciones de un acuerdo y, por ejemplo, activar automáticamente pagos ‘online’. Aunque estos contratos jurídicos prometen ser económicos y fáciles de usar, aún tiene que afrontar algunos desafíos
Source: MIT
The tech comes from Alphabet spin-off Chronicle.
Source: CNET
The World Wide Web Consortium announced it has approved a new authentication standard known as WebAuthn. Instead of a password, WebAuthn will allow users to log into their online accounts via a security device.
The post Browsing may soon be free of passwords as WebAuthn gains approval appeared first on Digital Trends.
Source: Digital trends
Members of Congress will work together to pass the “Save the Internet Act.”
Source: CNET