Our mission: to be the most aligned VC for founders at seed #ProudInvestor in @Uber, @TheTradeDesk @Airtable, @SeatGeek & more. Contact@FounderCollective.com
Cambridge, MA + NYC
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We’re often asked by entrepreneurs, VCs, and others in the entrepreneurial community, “What kinds of companies do you invest in?”
The short answer is – almost anything.
We’ve backed startups developing solutions in industries ranging from AdTech to Zoological DNA tests.
/🧵
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Expectation vs. reality of getting funded
⚾️ 1st Pitch
Expectation: 10%
Reality: <1%
🤝 2nd Meeting
Expectation: 50%
Reality: 10%
👩💼 Partner Meeting
Expectation: 90%
Reality: 50%
📜 Term Sheet
Expectation: 100%
Reality: 90%
inc.com/eric-paley/what-to-e…
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Total VC Raised (adjusted for inflation):
🛒 Amazon: $13M
📦 Ebay: $10.6M
❗️ Yahoo: $4.9M
Obviously a different time, but the beauty of software-based startups is that you don't need much capital. Also, these 50 case studies show it's still possible: hackernoon.com/50-big-compan…
Look at the size of the *venture* deals in today’s pro rata - $300m, $225m, $95m, $88m, $52m, $50m, $37m, and then finally some sub $25m deals.
That’s just today.
For context, Amazon, eBay, Yahoo raised $54m, $63m, and $34m in their *IPOs*
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What does it cost to make a running shoe? solereview.com/what-does-it-… Useful for anyone building a "DNVB" cc: @dunn
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A little too quietly...so for the people in the back:
📢OVER 📢 THE 📢 LAST 📢 10 📢 YEARS 📢 BOSTON 📢 HAS 📢 PRODUCED 📢 MORE 📢 BILLION-DOLLAR 📢 TECH 📢 STARTUPS 📢 THAN 📢 ANY 📢 CITY 📢 OTHER 📢 THAN 📢 SAN FRANCISCO 📢 AND 📢 IT'S 📢 NOT 📢 PARTICULARLY 📢 CLOSE! 📢
Boston has quietly become one of the hottest startup hubs in the US 🔥
Check out our new collection of Boston startups who are hiring today:
angel.co/job-collections/job…
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Disney combines 3-D Printing, vacuum-forming, and color graphics to create instant movie props popularmechanics.com/technol…
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Anyone who has worked with @dafrankel knows he's an exemplary investor, but we're thrilled to see him make his debut on the @Forbes Midas List at #11!
forbes.com/profile/david-fra…
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Periodic reminder that Boston has had more $1B+ exits, and has generated more exit value, than any startup geo outside of SF.
And that doesn't include biotech, life sciences, or devices...
medium.com/@foundercollectiv…
At Haystack, we only take mtgs w/ very small # of startups raising vs total inbound flow. In last 2 months, spent lots of time w/ teams building HQ in Boston. No new deals yet there, but wow, a flood of entrepreneurial talent.
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"I’m hearing about more and more of these brands with tiny teams generating over $10M in sales, with higher-than-normal-retail profit margins. What is driving this new wave of commerce, and what are the implications?" - @scottbelsky medium.com/positiveslope/att…
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We identified 63 investors who have a background in starting companies. Only 11 of those founders-turned-investors have built enterprises that have IPO’d or sold for more than $1 billion. hackernoon.com/theres-no-sha…
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Absolutely correct.
Airbnb and Uber were founded four years before anyone knew what the "Sharing Economy" was.
Use Cases > Trends.
medium.com/hackernoon/startu…
Trends are the ultimate red herring. Make things people want.
There are lots of things nobody is talking about that are huge problems, totally solvable, just with the right smart people, the right product, with the right go-to-market.
Follow first principles, not the crowd.
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How to build a better slide deck—great practical advice from Y Combinator / @ilikevests buff.ly/1Hd7t7Q
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The one and only @Cookie interviewed @dafrankel @epaley @micahjay1 about Founder Collective III and our future: techcrunch.com/2016/11/30/fo…
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Announcing Founder Collective III medium.com/@foundercollectiv…
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❌ Hiring Junior VPs
❌ Being cheap
❌ Micromanaging
❌ Falling in love with Logos
❌ Not going all-in geographically
❌ Not being merciless
❌ Not going up-market fast enough
❌ Not focusing on what’s working
❌ Not backfilling
❌ Taking too much advice
saastr.com/the-top-10-mistak…
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Be dynamic about how you deploy your capital:
🐌 When you raise a new round, plan to spend it over 30-36 months
🐰 If your plan starts to work, accelerate to 24 months
🚀 When you reach escape velocity, burn it in 12 months
HT @epaley
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HuffPo sold for $314M, Ariana Huffington made ~$18M
TechCrunch sold for $30M, Mike Arrington made ~$24M
If you fund your startup modestly, "mere" $30M exits can be pretty lucrative!
techcrunch.com/2016/09/16/ve…
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We recently reopened our NYC office — and we're hiring!
More here via @micahjay1: medium.com/@foundercollectiv…
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To help illustrate how companies can get started without VC, we’ve collected over 50 examples of businesses that started with a few thousand dollars, or even just sweat equity, and went on to become exemplars of what we call “efficient entrepreneurship.” hackernoon.com/50-big-compan…
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5 Lessons from PillPack’s Sale to Amazon, by @dafrankel medium.com/@foundercollectiv…
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"Crypto may look like it won’t work. Some will give up. Those who persevere will be rewarded."—@VinnyLingham buff.ly/2wVGfiy
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Honored to see the FC partnership on the @BusinessInsider Seed 100 list!
#4 Eric Paley (@epaley)
#6 David Frankel (@dafrankel)
#33 Micah Rosenbloom (@micahjay1)
businessinsider.com/seed-100…
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.@Pmarca has written the equivalent of 12 books since he started tweeting in 2014 buff.ly/1Dvrza1 @CBinsights
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Today we are happy to announce that we’ve closed our fourth fund, Founder Collective IV, to continue our mission to build the most aligned VC fund for founders at the seed stage.
medium.com/@foundercollectiv…
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We couldn't be more excited to welcome @Amanda_Herson to the partnership at Founder Collective!
foundercollective.medium.com…
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🕵️ Tech isn't good or bad—nor is it neutral
👩👧 Invention is the mother of necessity
📦 Tech comes in packages—big/small
🗽 Non-tech factors take precedence in tech-policy
🏛️ History is relevant—Esp. tech history
🤖 Tech is very human
HT @Mims
buff.ly/2ADOUeB
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Founder Collective 101: A collection of our most important writings to help entrepreneurs understand how we approach startups and venture capital.
medium.com/@foundercollectiv…
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When evaluating decks, Series A investors won’t treat companies with $900K and $1.1M in annual revenue differently. Don't mortgage your future to reach a made-up milestone. hackernoon.com/the-mythical-…
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You need fewer employees than you think:
⛏️ Mojang (creators of Minecraft): 12 FTEs, $80M revenue
📸 Instagram: 13 FTEs, 30M users
💬 Whatsapp: 55 FTEs, $19B exit
🐠 Plenty of Fish: 75 FTEs, $100M revenue
📰 Craigslist: 40 FTEs, 60M users
buff.ly/2GNJZvv @parulia
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Startups Are Made. collectivewisdom.io/feature/… … @Epaley on the thinking behind CollectiveWisdom.io
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"For every round of financing you skip, you save 10-20% dilution. If you skip 2-3 rounds of financing this could double your ownership at an exit." — @Jason calacanis.com/2019/09/09/the…
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💻 Software is a key lever in most of our investments.
💵 We favor founders who are commercially oriented.
🌱 Our investments happen exclusively at the seed stage.
Beyond those guidelines, we’re open to almost anything.
Here’s a sample of the startups we’ve backed:
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What to do when the growth stops—@jeff_jordan
☔️ Drop everything—focus on why
🔑 Involve all key people
🔎 Search maniacally for underlying causes
☝️ Assume the situation is self-inflicted
➗ Divide/conquer to get answers ASAP
🐝 Consider a Plan B
a16z.com/2015/09/30/what-to-…
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"Within the next decade, a political party funded by an ICO will win a national election!"—@VinnyLingham vinnylingham.com/the-new-fin… #PI
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Founder Collective takes a knee, alongside the black community, against hate of all forms and supports the protestors marching against the grotesque institutional racism in our society, hoping these marches beckon the better angels and lead our country to be a more just nation.
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Your VC Needs A Billion Dollar Exit. You Do Not. news.crunchbase.com/news/you… @micahjay1 HT @crunchbasenews
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Founders:
💰 We lead rounds with $1-2M
👛 We participate with $500K checks
🧬 We invest in everything from adtech to zoological DNA tests
🧱 Our mission is to be the most aligned fund for founders at the seed stage
Would you like to know more?
medium.com/@foundercollectiv…
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Why not to join a startup
🙃 Management
💰 Riches
🗻 Stability
Why to join a startup
🔑 Access to jobs you are not qualified for
🚪 Gateway to starting your own company
🧠 Optimize for rate of learning
HT @justinkan
atrium.co/blog/work-at-a-sta…
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Investor/Firm Reasons VCs Pass:
🧢 Problematic cap table
📽️ Bad presentation materials
📈 Valuation issues
💼 Undesirable terms
🚨 Co-investor dynamics
🙄 Fundraising tactics
🔄 You need to find a lead
❄️ Unpersonalized cold pitch
medium.com/@sarahadowney/the… HT @SarahADowney
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A famous investment scam just waiting to be reinvented as a "growth hack" buff.ly/1IZIiQk HT @englishpaulm
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If you’re working on AdTech, EdTech, FinTech, MedTech, or any other kind of tech – please reach out.
It doesn’t matter if you’re B2B, D2C, IoT, SaaS, or some other acronym that hasn’t been invented yet – we’d love to chat.
Contact@foundercollective.com
/End
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Congrats to @epaley who jumped 20 spots and landed at #11 on the @Forbes Midas List! forbes.com/midas/#/tab:overa…
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Excluding Facebook/Twitter, there is almost no relationship between amount of VC raised and startup success. @epaley techcrunch.com/2016/10/15/ov…
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Five Brilliant Women Investors You Should Know:
@jefielding - @techstars
@nkatragadda - @boxgroup
@nstata - @BostonSeed
@dunkhippo33 - @hustlefundvc
@sorayadarabi - @trailmixvc
And don't forget FC's @Parulia!
medium.com/swlh/pitching-for…
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Never have we been more committed to our strategy of small funds, focused on the seed stage to foster alignment with founders.
Today, we're excited to announce our 5th Fund!
linkedin.com/pulse/founder-c…
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On average, one Israeli startup was acquired for over $100m every week in the first half of 2019!
Fantastically informative post about the state of Israel's tech ecosystem by @EntreeCap and @aeyal1!
medium.com/entree-capital/st…
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Q – Q&A for technical audiences – @StackExchange
R – Resin-based 3-D printers – @Formlabs
S – Security system management – @VerkadaHQ
T – Ticketing – @Seatgeek
U – Upscale, plus-sized fashion – @diaandco
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Congrats to @Andela and @trustedhealth for being named to Forbes Next Billion-Dollar Startups list! Well done! @JeremyJ @sasschristina @iaboyeji @nadayar @briceicle @IanCarnevale @lenniesil @mdpierce_ @lennie_s
forbes.com/sites/amyfeldman/… HT @amyfeldman
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V – Video games that replace pills – @NeuromotionLabs
W – WWW frameworks – @Ionicframework @JuliaComputing
X – X-Ray for business processes – @Optimizely @blissfully
Y – Youth enrichment toys – @Lovevery
Z – Zoological DNA test kits – @embarkvet
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L – Logistics – @Transfixio
M – Metal 3-D printers – @DesktopMetal
N – Nursing marketplaces – @trustedhealth
O – Online piano lessons – @joytunescom
P – Pharmacy 2.0 – @PillPack
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Our NYC office is coming together nicely! Painting is done, portfolio company logos will soon be hung, but most importantly—we have open desks we need to fill!
medium.com/@foundercollectiv…
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Congrats to @dafrankel for making his third consecutive appearance on the Forbes Midas List!
And thanks to @coupang, @seatgeek, @shieldAI, @motorway, and many others for making it possible! #ProudInvestor
forbes.com/lists/midas/?sh=4…
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"Medium-agnostic but mission-centric"—almost every line of this podcast between @scottbelsky and @ajs is quotable businessinsider.com/scott-be…
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Proud First Investor.
We’re thrilled to share that @amazon has agreed to acquire PillPack. Together, we will continue making it easy for customers to save time, simplify their lives, and feel healthier. We’re excited for our future together. Read more: bit.ly/2KwSXuA
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Seed investors that should be on any founder's short list:
@jefielding - @Techstars
@sorayadarabi - @trailmixvc
@nkatragadda - @BoxGroup
@nstata - @BostonSeed
@dunkhippo33 - @hustlefundvc
@parulia - @fcollective
buff.ly/2HZfqQw
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.@Andela teaches people in Africa how to code, and apparently, how to write killer blog headlines medium.com/@hanmaslah/from-n… #ProudInvestor
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Quick aside, these obviously aren’t the exact terms the founders use to describe their businesses, and we hope they don’t mind the creative license we’ve taken to cover the alphabet :-)
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F – Flooring-as-a-Service – @adhawk
G – Gifting tech - @AlyceGifts
H – HealthTech – @omadahealth @Whoop @kinsa
I – InsureTech – @CoverWallet
J – Just-in-time accommodations – @HotelTonight
K – Korean ecommerce – @Coupang
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There are half a dozen tech Unicorns in Utah. Sydney, Australia has at least three. Boston has had at least one $1B+ tech IPO every year for the last decade. You can build a great startup in more places than you think. buff.ly/2LeGe4a Great post by @semil
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There's been a $1B+ software tech IPO in Boston every year for the last decade. And many, many, many more acquisitions. Bio is great, but Boston is easily the second best city in tech, measured by liquidity.
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A – AdTech – @TheTradeDesk @IntegralAds @Moat
B – B2B SaaS – @Airtable @Drift
C – Consumer transportation – @Uber
D – D2C cologne – @Hawthornelab
E – EdTech – @Codecademy @Skillshare @ClassTag @Andela
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“The myth of our industry is we invest in ideas - we don’t - we invest in execution.” -@epaley
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Part of the reason so many of these VCs had great outcomes at well below unicorn fantasy levels is that they raised the right amount of money for their businesses at valuations that maintained exit options. hackernoon.com/theres-no-sha…
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In the right hands, VC is a powerful tool that helps accomplish goals faster than customer funding would allow. Often it is used improperly and becomes a destructive distraction that enables bad habits that sinks startups. hackernoon.com/the-warning-l…
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.@CBinsights doesn't get enough credit for creating compelling, visual content every day.
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6 Brilliant seed investors that should be on every entrepreneurs' short list:
Jenny Fielding - @jefielding
Soraya Darabi - @sorayadarabi
Nimi Katragadda - @nkatragadda
Nicole Stata - @nstata
Elizabeth Yin - @dunkhippo33
Parul Singh - @parulia
buff.ly/2HZfqQw
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"We want to fund the next Uber, Google and Facebook. The reality is that not every business is suited for that." buff.ly/2FWTq72
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Top 5 Deep Learning projects on Github: @TensorFlo, Caffe, NeuralStyle, #DeepDream, Keras buff.ly/2b7WtdX
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Startup success—@ionicframework went from launch to a top 50 open source project in a year buff.ly/19eSZV5
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Billion-dollar exits are breathtakingly rare—and smaller exits lead to stupendous careers: techcrunch.com/2017/05/16/th…
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"Why they made the list: Outsized returns from many of its investments, despite being founded just a decade ago." - @theinformation. Thanks to @amir, @zoeSaintBernard, and @Jessicalessin for including FC in their inaugural list of seed investors to watch! theinformation.com/articles/…
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One of the hottest startups in Boston, is closing in on a $100M run rate, has taken zero capital and was founded in 2015. There are plenty of "invisible unicorns" waiting to be discovered. techcrunch.com/2017/07/01/in…
“What matters to investors now is to drive startup valuations into unicorn territory via rapid growth – usually users, revenue, engagements but almost never profits”
RIP Lean Startup™️? steveblank.com/2018/09/05/is…
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How likely are you to get funded if:
🗣️ The VC Invites You to Pitch?
☕️ The VC Invites You to a Second Meeting?
👩💼 The VC Invites You to a Partner Meeting?
📜 The VC Offers You a Term Sheet?
@epaley breaks down the odds:
inc.com/eric-paley/what-to-e…
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Tech exit value / capita [$ in thousands]
🌉 SF - $133
👩🎓 MA - $8.6
☕️ WA - $6.7
🐝 UT - $6.6
🇮🇱 IL - $6.5
🇸🇪 SE - $4.9
🏔️ CO - $3.7
🌞 LA - $3.2
🇳🇱 NL - $2.6
🍎 NY - $2.1
🇫🇮 FI - $2.1
🐄 IL - $1.5
🇦🇺 AU - $1.4
🇨🇦 CA - $1.3
🤠 TX - $0.6
🇬🇧 UK - $0.6
🇩🇪 DE - $0.2
🇫🇷 FR - $0.06
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Congrats to @epaley on grabbing the #10 spot on this year's @Forbes #MidasList, making him the highest-ranked seed investor for the second year in a row! forbes.com/profile/eric-pale…
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"You don’t need venture capital to get started if you can solve a real problem for customers and charge money for it." hackernoon.com/50-big-compan…
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Of 166 tech IPOs in the 2010s:
73 raised <$100M of VC
31 raised <$50M
10 raised <$20M
Veeva–a top 20 most successful startup of the last decade–raised only $4M.
Atlassian, a member of the top 10, was bootstrapped.
You need less than you think.
foundercollective.medium.com…
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Great companies are started in all kinds of markets buff.ly/1E3NH7j @jloganbartlett @mattermark @pmarca
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As a very general rule of thumb, venture fundable businesses need to have 10X returns, scale quickly, and have a plausible endpoint valuation above $100M (which varies fund by fund, but usually trends higher not lower.) - @parulia buff.ly/2IE6eAW
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Read @scottbelsky's new book and you'll learn how to:
🔬 Optimize the hell out of everything that works
🎢 Endure the human-tendency-defying woes of the middle
🔩 Not screw up “the final mile” of a successful project
medium.com/positiveslope/nav…
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"The @uLessonApp has now been downloaded a million times with paying users from at least 7 countries (including countries we don’t formally serve). On average, learners spend ~77 minutes on the app daily" – @SimShagaya
medium.com/@simshagaya/uless… #ProudInvestor
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If you're exceptionally strong in even one of these areas, let's talk about our new Senior Associate role...
foundercollective.medium.com…
If you can hit 2 or more, we've got a Principal position for you!
foundercollective.medium.com…
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🚩 What red flags do you look for?
🌜Most ridiculous pitch you've seen?
🥇 Best piece of advice an investor ever gave you?
@larrykim interviews @Parulia about what it takes to get VCs interested.
medium.com/marketing-and-ent…
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This also isn’t an exhaustive list.
We’ve invested in many weirder and even more wonderful companies than could fit in a thread, and many haven’t been announced yet.
Our goal is to be the first money into news startups that will make these look traditional in comparison.
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AI can identify photo locations with scary accuracy:
Street—3.6%
City—10.1%
Country—28.4%
Continent—48.0%
technologyreview.com/s/60088…
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Don't know the difference between cap tables, dilution, and double ratchets? Read this excellent primer buff.ly/2biO4mS HT @smc90
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Bootstrapped for nine years, @Grammarly built a nine-figure business sale by sale medium.com/swlh/how-grammarl… HT @hnshah
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Steps 1-10:
1. 📝 Build a list
2. ✂️ Trim the list
3. 👉 Fixate on leads
4. 🔬 Focus on *this* round
5. 🔪 Make one more cut
6. 📦 Prep an intro package
7. 🗝️ Choose intros
8. 🗓️ Schedule ~10 Meetings
9. 🛴 Pad the schedule
10. ⚾️ Practice your pitch
medium.com/swlh/a-ridiculous…
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Of the 20 best tech startup IPOs of the last 5 years:
14 raised <$125M
6 raised <$50M
one raised $0
techcrunch.com/2016/10/15/ov…
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Uber's Law: By the end of every pitch a startup will find a way to compare itself to Uber—@Epaley
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"You might simply consider SPOT a very first proof that blockchain technology can be used to solve a problem of substance, that otherwise truly could not be solved — inflation." – @evankuo / @AmpleforthOrg
#ProudInvestor
blog.ampleforth.org/the-spot…
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For every one of the startups in the chart above who are worth more than $5B, there is an unhappy customer segment. A segment that can be identified, targeted, and better served. A customer segment that can create a billion-dollar company. - @ttunguz tomtunguz.com/time-to-disrup…
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