Collaborative Venture
Gil Dibner

Over the past few years, VC seems to have become substantially less collaborative — particularly between funds of similar sizes. I think there are three main reasons for this: First, VCs are all dealing with valuations too high for their fund sizes, so no one is getting their target ownership. As a result, VC have developed much sharper elbows as they battle for allocations. Second, founders are carpet-bombing VCs in choreographed FOMO-optimized fundraising campaigns. This makes it harder for VCs to collaborate with each other because deals are increasingly set up as straight-up auctions. Third, the timeframe from first contact with a founder to investment decision by a VC has dramatically compressed — often less than a week and frequently less than 24 hours. There isn’t time to cross-pollinate ideas, compare notes, or syndicate thoughtfully even if a VC wanted to do so. Great syndicates sometimes happen when multiple investors are struggling with a decision. Sometimes, when sharing that struggle, they can decide to work together to share risk and support each other’s decision-making.

At Angular, we are very comfortable moving alone. Of the last ten deals we’ve done, we’ve led nine. We tend to gravitate towards very early-stage contrarian opportunities where it can be hard to find co-investors to join. (Nine of our last ten investments were first checks rounds.) But we are also very comfortable working together with funds both larger and smaller. In several cases, we’ve worked to bring in co-investors. We’ve actively syndicated investments with larger funds and with smaller funds — and we’ve been willing to take reduced ownership to make sure the syndicate dynamics work.

One of the best parts of VC (and one of the best parts of my work experience) is working together with great VCs, partners, angels, and others whose opinions I value and whose values I trust. That’s not gone away, but it’s rarer — which is sad. And that’s worth pausing to think about. We are eager to work closely with friends we know and trust — and we are eager to identify new partners to work with. The trend towards sharper elbows does not need to shape every VC’s experience on every deal. When the cycle turns, we’ll all be grateful to have multiple trusted partners around the table. To the VCs reading this, consider it an open invitation to share your most challenging investment decisions with us. Let’s see if together we can revive some of the cooperative spirit that made venture such a rewarding field for so long.

EVENTS

Sept 29 / Scaling Sales: Crafting the Right Approach
Ben Braverman, Chief Customer Officer, Flexport

Oct 13 / Fireside Chat with Leigh Moore, VP of Marketing at Snyk
Leigh Moore, VP of Marketing, Snyk

Oct 20 / Building Developer Products and Communities
Amir Shevat, Head of Product — Developer Platform, Twitter

Oct 27 / Open Source and Category Creation
Emil Eifrem, Founder & CEO of Neo4j

FROM THE BLOG

Why we Invested in CruxOCM:
Robotic Industrial Process Automation

The Great Acceleration of Seed Investing:
Can seed funds and accelerators work together?

Angular’s Brand Strategy:
Revisiting our brand as we launch our new website

Why we Invested in Levity.ai:
A no-code ML-powered workflow on every desktop

EUROPE & ISRAEL FUNDING NEWS

Israel/SME Payments. Melio raised $250M for its payments platform geared toward small and medium-sized businesses.
Netherlands/Ecommerce Shipping. SendCloud raised $177M for its e-commerce shipping platform.
UK/Payments. Form3 raised $160M for its payments-as-a-service infrastructure platform.
UK/Data Tooling. Matillion raised $150M for its cloud data integration platform for data warehouses.
Netherlands/Solar Cars. Lightyear raised $110M to continue building out its solar electric car company.
Armenia/Skills Assessment. Code Signal raised $50M for its platform that assesses the tech skills of an applicant allowing a company to index talent over a resume.
Israel/API Security. Neosec raised $20.7M for its cybersecurity platform designed to secure APIs.
UK/Compliance. PassFort raised $16.2M to continue to help businesses meet compliance requirements such as KYC (Know Your Customer) and AML (Anti-Money Laundering).
UK/Freight. Vector.AI raised $15M for its productivity platform for freight forwarders.
Israel/Software Adoption. EverAfter raised $13M to continue developing its no-code customer-facing tool that streamlines onboarding and retention.
UK/Sustainable Supply Chain. Sourceful raised $12.2M for its supply chain sustainability platform which uses data to help make supply chains greener.
Netherlands/SRE Collaboration. Fiberplane raised $8.8M for its collaborative notebooks for SREs (site reliability engineers) to collaborate around an incident in a similar manner to group editing in a Google Doc.
Belgian/Freelancer Tax App. Accountable raised $7M for its tax platform for the self-employed.
Germany/Procurement Automation. Lhotse raised $5.8M for its SaaS platform that automates and simplifies procurement.

WORTH READING

ENTERPRISE/TECH NEWS

Is BI dead? Maybe. Benn Stancil argues that BI in any traditional sense is dead and that the future “BI” will look more like a hybrid mash-up of ad hoc analytical tools and self-service data exploration tools. There will no longer be “a complete end-to-end stack, responsible for nearly all of a company’s analytical needs.” According to Benn, the reason for this is that “the boundary between BI and analytical research is an artificial one. People don’t sit cleanly on one side or the other, but exist along a spectrum (should a PM, for example, use a self-serve tool or a SQL-based one?). Similarly, analytical assets aren’t just dashboards or research reports; they’re tables, drag-and-drop visualizations, narrative documents, decks, complex dashboards, Python forecasts, interactive apps, and novel and uncategorizable combinations of all of the above. By defining BI as just self-serve, we shortcut what it could be, no matter how good that self-serve is. A better, more universal BI tool would combine both ad hoc and self-serve workflows, making it easy to hop between different modes of consumption. Deep analysis could be promoted to a dashboard; self-serve tools could unfurl into technical IDEs.”

HOW TO STARTUP

Zoom Board Meetings. As a CEO of an early stage company, effectively running a zoom board meeting is vitally important. Scribble Ventures’ Elizabeth Weil shares five rules for running a fantastic board meeting — leveraging the approach of Andrew McLeod from Certn.

HOW TO VENTURE

QED Insights. After investing in 150 startups over 14 years, QED’s Frank Rotman shared 14 brilliant and thoughtful insights. One insights which particularly resonates is Insight #6: “Being an exceptional storyteller is a necessary skill for Founders. Storytelling doesn’t directly crack the code on an unproven business but it does create tangible value for Founders/Investors by catalyzing critical resources. Great storytelling attracts and retains talent. Great storytelling shapes the marketing messages used to intrigue and onboard customers. Great storytelling speeds up diligence and lands great Investors/capital. Great storytelling makes everything easier.”

Track Records. While many LPs focus on track records when selecting which funds to invest in, Craig Thomas analyzes the value of track records and determines that their signal for LPs should be minimal. He argues that, in venture capital, “track records over long periods of time more closely correlate with decision quality”, while short term track records have a low correlation with decision quality. In addition, LPs who are overly focused on track records can easily miss promising emerging managers — and the next generation of great venture capital funds.

The commoditization of capital in a crazy market. Phil Barnes of Sneakerhead VC put out a great twitter thread this week explaining why VCs think the market is “crazy” and what that means for VC strategy. He argues that capital has become a commodity and that this dynamic is creating a situation that rewards speed of deployment over all else. Founders see most VCs as interchangeable and — crucially — VCs see most companies as interchangeable because they are all seen as attractive. “The belief that all investments in a market are surprisingly great supports a strategy of maximum capital velocity and minimal company engagement where all investments are “the same” — accelerating the commodification of capital and partnership.” Phin concludes that VCs need to figure out what lever they are going to pull to differentiate and “pull it as hard and far as you can — the only thing rising faster than the competition’s fund size is the pressure to offer a truly differentiated service.”

PORTFOLIO NEWS

Vault Platform empowers employees to report misconduct, everything from racism to fraud to COVID violations — before it becomes a reason to quit, a media scandal or an environmental disaster.

Firebolt’s CEO, Eldad Farkash, was selected as one of Solutions Review’s coolest data management and big data CEOs of 2021.

Trellis.ai is enabling smart supply chains built for agriculture food and beverage industry.

Forter published the Definitive Guide to False Declines.