A new look and a look at what’s new
Gil Dibner

Same newsletter, new look and new name. First and foremost, you might have noticed that this newsletter has gotten a fresh coat of paint. Welcome to the first official edition of Angular Ventures’ The Angle! Special thanks to Anne who oversaw the entire process. We hope this new format and infrastructure will make it easier to read, easier to share, and easier to subscribe. This newsletter now reaches over 9,000 readers, and many of you mention to us in person that you appreciate the work we do to bring it to you every week. Perhaps now is a good time to remind our readers that we would really value your help in expanding our readership. If you know of someone (or ten…) who might benefit from getting this in their inbox, please do us a solid and forward this on. Subscribing is now easier than ever. And thanks for reading!

A look at what’s new. I recently found myself listening to the Turpentine VC podcast with Vinod Khosla. Vinod, who co-founded Sun Microsystems in 1982 and founded Khosla Ventures in 2004, is going to turn 70 in January. What’s remarkable about Vinod is how clearly he speaks about what it means to be a contrarian investor. He talks at length about how his firm has intentionally and aggressively tracked, explored, and invested in new spaces that were unpopular and/or companies that were deeply controversial. The essence of venture, he says, is to invest in “something that you believe in that the market does not believe in and stick with it in the ups and downs.” The examples he gives include frontier technologies (such as fusion), radical business models (public transportation), and deeply unconventional companies (OpenAI at the outset). Interestingly, he emphasized the need to track a space over time and deploy capital into it in order to stay close to emerging trends and develop deep expertise. He describes how his firm has committed “a few million dollars” in various areas, seen the investments fail, but then been in a position to invest more capital into more interesting companies down the line, in part because of the expertise and connections established by being early and involved in an industry.

Angular is a relatively small - and still relatively new - firm. We have nowhere near the track record that Vinod can rightfully claim. But we are deeply inspired by the spirit of risk-taking venture capital that Vinod embodies. And his words capture a lot of what is driving our investments - particularly now. While we haven’t shouted it from the rooftops, we have been investing in AI and AI-first companies (Aquant, CruxOCM, Fixefy, Forwrd, Levity, Tensorleap, Valohai, and others) for years and, in fact, from before the fund was even officially launched. AI felt then - and continues to feel now - like the natural extension of many decades’ trend of digitization, instrumentation, data analysis, compute, and predictive power. The first time we invested in an AI-first business, we were told it was “impossible” for anyone to build what they were building. Today, all these AI-first businesses are clearly possible, so perhaps it’s only natural that we have been drifting towards weirder and weirder stuff…in search of the supposedly impossible, in search of the truly contrarian.

More recently, we’ve been venturing further and further from traditional areas of venture investment. We’re actively deploying capital into companies in non-traditional verticals like shipping and knowledge management for the defense sector. We’re actively deploying capital into two companies in the energy domain - one in energy management and one in energy generation. We’re actively deploying capital into two companies in spacetech, one in rockets and one in - well something we can’t disclose just yet. We’re looking at next-generation manufacturing marketplaces. We’re also looking at companies that are reinventing well-established and very crowded markets from the ground up. Over time, we find ourselves spending more and more time with companies that are weirder and weirder.

At first, this can feel strange. It is uncomfortable. There are few relevant co-investors. We are often alone. We find ourselves studying markets and technologies from very first principles. Though we can learn a lot and uncover many insights in our diligence, we ultimately find ourselves face to face with just how much knowledge we lack in a brand new area. We must contend with how much is simply unknowable. And yet - the fundamentals of entrepreneurship and risk are unchanging. When we look back on our track records - and that of the industry in general - with a wide enough lens, it becomes clear that the best and most interesting companies were almost always the ones that were the weirdest and the most difficult to understand. They were - almost to a fault - the ones on the verge of being too crazy to back.

Despite the lack of comfort, we are embracing this approach. We are very intentionally seeking out opportunities to lead rounds in radically new and deeply contrarian companies. Over the next few months, we hope to be in a position to share publicly some of these more radical investments. We are incredibly excited by the new (and somewhat crazy) companies we’ve backed recently. And we are encouraged by how many of the companies we backed that seemed truly crazy just a few years ago (CruxOCM, Aquant) seem anything but crazy now…

If you or someone you know is building something that you know can be big, but you fear is too crazy for most VCs…we hope you’ll remember that we see that exact situation as the best definition of what we are supposed to be working on.

Gil

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Israel / Security. Oasis Security raised $40M, led by Sequoia, Accel, Cyberstarts and Maple Capital, to build its non-human identity-aware security platform.

UK / SaaS. Peregrine raised $30M, led by Friends & Family capital and Fifth Down Capital, for its data integration platform targeting state and local government agencies.

Belgium / Security. Aikido raised $17M, led by Singular, to build a next-gen Snyk-like developer-focused security platform.

France / SaaS. Carbonfact raised $15M, led by Alven and Headline, for its carbon emission visibility platform targeting the fashion industry.

ENTERPRISE/TECH NEWS

Cancer cure. Researchers at the University of Florida report they have developed an mRNA cancer vaccine that quickly reprograms the immune system to attack glioblastoma in a first-ever human clinical trial of four adult patients. From the article: ”Among the most impressive findings from the reported study was how quickly the new vaccine, delivered intravenously, triggered a vigorous immune-system response to reject the tumor, said Sayour…“In less than 48 hours, we could see these tumors shifting from what we refer to as ‘cold’—immune cold, very few immune cells, very silenced immune response—to ‘hot,’ very active immune response. That was very surprising given how quick this happened, and what that told us is we were able to activate the early part of the immune system very rapidly against these cancers, and that’s critical to unlock the later effects of the immune response.”

Space solar. Scientists from South Korea’s Korea Aerospace Research Institute (KARI) and the Korea Electrotechnology Research Institute presented their plans, in a new paper, for a 120 GW solar array in space. The plans “presented a conceptual design of the satellite, its end-of-life disposal method, and a first pilot system and experiment.” This is the latest in a series of explorations of the concept of space-based solar. See this paper from NASA from January, or this article on the company Space Solar in the UK.

Fusion future. Fusion could, theoretically, produce electricity without emitting greenhouse gases or generating radioactive waste. However, to make fusion work, we need to compress hydrogen plasma fuel at incredibly high temperatures and pressures, which can only be achieved by the use of magnetic fields. MIT’s Plasma Science and Fusion Center, and the MIT spinout company Commonwealth Fusion Systems, recently published a collection of six papers in IEEE Transactions on Applied Superconductivity details that a new type of magnet could make an economically viable fusion device more likely. As MIT engineering professor Dennis Whyte is quoted as saying: this test is “the most important thing, in my opinion, in the last 30 years of fusion research.”

GitHub’s pair programmer arrives. Read this overview from Dan Shipper of Every on his first 24 hours spent with GitHub Copilot Workspace, Github’s answer to Devin (and the other programming agents out there). As Shipper writes, if you think of GitHub Copilot as programming “autocomplete” then GitHub Copilot Workspace is like a “pair programmer” hanging out with you at all times. Because it has access to your entire existing codebase, it enables you to code in plain english. It will read what you instructed, then construct a step-by-step plan to build what you want, and wait for your greenlight. As Shipper writes, “the next programming language is English.”

HOW TO STARTUP

7 Powers. A fantastic interview with the popular, yet still somehow underrated, strategist, Hamilton Helmer, author of 7 Powers. Well worth a listen by all founders out there. Helmer dives into the eponymous seven sources of power that a company can wield, but also, critically, provides a handful of updated and more current/relevant examples of how these powers come into play.

Not today, Series A. The latest data from Peter Walker of Carta isn’t looking good. Of the companies that raised in 2018, 25% raised an A in under 2 years. Of the companies that raised in 2020, 36% raised an A in under 2 years. Now? According to Walker, only “12% of Q1 2022 seeds have made it to A so far.”

Strategy shift. It’s rare enough for large companies to make significant strategic shifts, but rarer still to see the discussion that caused the shift to begin with. But that’s just what we got to see this past week with the publication of Microsoft CTO Kevin Scott’s email about Microsoft losing the AI battle and what to do about it. Read this write up from the Verge on the tick tock, and this write up from a16z partner Sriram Krishnan for an analysis of what makes this memo from Scott so interesting.

HOW TO VENTURE

Deals down. Median deal sizes are down across the board for the first time in years, according to the latest from Crunchbase. From the article: “...starting in the second half of last year, average and median round sizes have flattened or shifted down. The downward shift is noticeable but gradual, with more mature companies from Series C onward hit the hardest for now. For the past quarter, seed through Series B fundings hovered above 2020 average and median size, while Series C fundings remained below.”

Aquant’s CEO Shahar Chen wrote about the three steps to successful AI user adoption in Forbes.

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