Showing posts tagged Venture Capital

The Story Behind Qualtrics, The Next Great Enterprise Company.

#SuryaRay #Surya Editor’s note: Derek Andersen is the founder of Startup Grind, a 35-city event series hosted in 15-countries that educates, inspires, and connects entrepreneurs. He also founded Commonred and is ex-Electronic Arts. I met Ryan Smith about nine years ago in a college apartment in Provo Utah. We were both attending school, and after asking him what he was working on he replied, “I’m building an online research company with my dad called Qualtrics.” Nine years later Qualtrics has 5,000 customers, $70MM in funding, and turned down a $500MM acquisition offer last year in a bold attempt to build a billion dollar company. Qualtrics was well described last year when Sequoia Capital partner Bryan Schreier called them the “largest software company you haven’t heard of yet.” That is changing quickly. If you don’t know, Qualtrics was created by Ryan and has dad as a way to help schools and companies gather feedback and data on students/customers through surveys. They have 5,000 customers including FedEx, Hewlett-Packard, JetBlue, Microsoft, PepsiCo and Zappos. The company was started by Ryan and his dad. I recently interviewed Ryan at Startup Grind Utah and learned how it all happened. In the summer of 2001 while doing an internship at Hewlett-Packard, Ryan’s dad Scott called him and said he had throat cancer and would begin treatment immediately  so Ryan returned home and took a semester off school. While at home he found that his dad, who Ryan describes as a “super early adaptor,” had built the technology that was the beginning of Qualtrics. Each day after Scott returned from chemotherapy they would work on the product. By the time Scott had returned to full strength, Ryan had signed up 20 customers and they had hired a small team to build out the product. The first customers were in academia. Ryan realized that he could easily find key decision makers’ contact information online, and since it worked for one it seemed only natural that it would work for others.  The first customer was a professor at the Kellogg School of Management. Ten years later the first ten Qualtrics customes are still customers. All of this was literally happening from Ryan’s parents’ basement in Provo Utah in 2002 and 2003. Ryan’s first big hire was a friend that he convinced to turn down a $60,000 job to make $8,000 at Qualtrics. Don’t worry – after over delivering he made $12,000 the next year. By 2004 they had 20-people and there were so many cars on their street that neighbors @suryaray

Former Square COO Keith Rabois Joins Square Investor Khosla Ventures As Partner

#SuryaRay #Surya Keith Rabois is going to be a full-time investor after more than a decade in operating roles. And fittingly, he’s be doing that as a partner at Khosla Ventures — a high-powered firm as fiesty, contrarian, and entrepreneur-focused as he is. Rather than being put off, Silicon Valley had jumped at the chance to hire him after he left his COO role at Square over an employee’s sexual harassment claim in January. Sources say that while he was weighing offers from Khosla and a new executive role at AirBnB in recent days, he also fielded serious inquiries from a large handful of other venture firms and tech companies. Firm founder Vinod Khosla has had one of the better views of the situation. He sits on Square’s board and so is privy to the details of the claim. When I asked him for comment on the matter during a phone interview yesterday, he only pointed me to the supportive statements from the company, and Rabois’ own post on the matter – but the hiring reads like a big “he’s not guilty” sign. Rabois and Khosla have been working together as investor and startup executive since 2007, and through other difficult situations — a theme Khosla hits on in a separate post for us today. In it, he explains how his firm is focused on hands-on “venture assistance” to entrepreneurs they invest in, helping them through the inevitable highs and lows of building big-league tech companies. Khosla put money into app developer Slide in 2006, shortly before Rabois joined it from LinkdedIn. The company ultimately sold to Google in 2010 for $228 million, after a long journey building a variety of social apps designed around self-expression. At times it had major hits like a slideshow widget on MySpace and the famous sheep-throwing app SuperPoke! on Facebook, but it never found a truly big business in that fast and loose industry. Rabois’ move to Square after the sale marked a return to his roots in the payments business. He’d been an early leader at PayPal during its ride to public offering and eventual sale to eBay. A formative member of the PayPal Mafia, he’s been actively investing for years (we currently count  around 40 investments in CrunchBase). He’s currently on the board of money-transfer service Xoom since 2003, which ten years later has just had a successful IPO this month, and reviews site Yelp since @suryaray

The Real Top 15 Venture Capital Deals Of 2012

#SuryaRay #Surya Editor’s note: _Brad Garlinghouse is CEO of YouSendIt, the cloud file collaboration service. He is an avid angel investor in and advisor to several consumer and enterprise tech companies._ The news that electric car company Fisker Automotive could potentially be acquired by Chinese automaker Dongfeng Motor for about $425 million reminded me of an article that’s been eating at me for some time. @suryaray

Ed tech accelerators go corporate: Pearson and Kaplan launch startup programs

#SuryaRay #Surya Have an idea for an ed tech startup? Now might be a good time to go forward with it, because in the last month not one, not two, but four new ed tech accelerators have launched.

Earlier this month, we reported on the launches of Boston’s LearnLaunchX and New York’s Socratic Labs. On Monday, Kaplan and TechStars announced a new ed tech accelerator and on Wednesday, Pearson announced its own incubator for ed tech companies. Until this year, Palo Alto’s ImagineK-12 was the only traditional accelerator focused on ed tech.

While Kaplan’s program will follow the model of other TechStars programs (mentorship, space and capital in exchange for a bit of equity), Pearson is taking a slightly different approach with its incubator, called Catalyst. Ten accepted startups will continue to work from their own locations and mostly receive remote access to Pearson executives and product experts. They’ll each receive a $10,000 stipend for travel and other expenses (to enable meetings with their mentors and others), and will have the opportunity to present at a Demo Day at the end of the program.

Another big difference in the Pearson model is that the company won’t be taking an equity stake in any of the companies accepted to the program. If and when the startups raise financing, Pearson could invest separately, but there are no guarantees. The company also said that Pearson could become a customer of one of the startups during the program.

Socratic Labs has already announced the startups in its inaugural class, but it will be interesting to see what kinds of companies the other programs attract and accept. Pearson’s name and position as a potential acquirer could appeal to founders, as could the fact that its program doesn’t take equity. But while Pearson’s program only provides mentorship from Pearson executives, Kaplan’s accelerator, which will be based in New York, carries the weight of the TechStars brand and offers access to a wider group of mentors. Supporters include ed tech founders Udemy CEO Eren Bali, Kaplan’s CEO Andy Rosen, and General Assembly CEO Jake Schwartz, as well as TechStars co-founders David Cohen and Brad Feld, Columbia University’s chief digital officer Sree Sreenivasan and others.

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Iterations: How Founders Can Fight Through The Great Fragmentation Of Talent

#SuryaRay #Surya The #1 request I hear when talking to founders in San Francisco is: “We are hiring engineers. Know any?” We all know this is a big issue that’s only getting worse, and so do most of the investors. But, I’m now starting to hear this so often, I’m beginning to worry that all the conventional tactics simply won’t work. Early-stage startups that don’t start experimenting with new ideas to source, recruit, and close engineers and other technical hires may end up running out of money or never achieving the product traction they need to get to the next level. I don’t have data to support this, but my intuition is that technical talent is so fragmented right now, all options need to be reexamined and placed on the table. @suryaray

Boost For Israeli Startup Scene As Magma Venture Partners Fuels Up With $100M+ Third Fund — Taking Total Fund Size To $300M+

#SuryaRay #Surya Israeli early stage high tech startup VC fund Magma Venture Partners, whose current portfolio includes online video-editing software developer Magisto, mobile analytics company Onavo, and navigation app maker Waze to name three, has completed fundraising on its third fund — Magma III — exceeding its target of $100 million. Magma said it manages more than $300 million to-date. @suryaray

Hunter Walk Leaves Google After 9 Years To Start VC Firm With Satya Patel Called Homebrew

#SuryaRay #Surya Earlier today, CNNMoney broke the news that well-known Googler/YouTuber Hunter Walk and former Googler Satya Patel would be starting a new VC firm called Homebrew. What wasn’t known was whether Walk would be leaving Google to pursue Homebrew full time, but he has confirmed that to be the case. The last time that we spoke with Walk, he was passionately explaining all of the things he gets to work on with the YouTube For Good team, which was a team that I didn’t know existed. It consisted of people with all types of skill-sets, including forward-thinkers and leaders like Walk, who would help out non-profits and organizations with spreading their message and raising awareness for their programs using YouTube. In a blog post, which is the email that Walk sent to his colleagues at Google, he thanked those who brought him into the company and gave a glimpse into the Google culture that you hear from those who have “re-entered the mainstream” after leaving the Mountain View company: After nine years, two months it’s time for me to figure out how to make lunch for myself. Yup, I’m leaving Google and it’s my year-old daughter’s fault. You see, when I look at her I think about the values my wife and I want to instill. Among the most important is the belief that you should pursue all your dreams, think big, lean into your fears and keep building. The best way for me to teach this is by example, so I need to step away from Google’s comfort. No next adventure to announce yet – this is about feeling there’s more for me to do, but also knowing I need some space to figure it out. Google has changed my life. The chance to work with so many smart and creative people – thank you for letting me learn from you. There’s no university in the world which could have supplied equal education. Because of my time at Google I truly look at the world in a different way, one of problems waiting to be solved rather than insurmountable obstacles or indelible truths. I’m especially appreciative of Joan Braddi, Susan Wojcicki, Chad Hurley and Salar Kamangar – leaders who took me into their teams and, when it was time, encouraged me to find new challenges. Selfless, intelligent and loyal to Google. While being inside of Google is special, passing through @suryaray

Samsung Invests In Cloudant, A CIA-Backed, YC Alum That Specializes In Database-As-A-Service Technologies

#SuryaRay #Surya Samsung continues to come good on its commitment to investing in more startups that will help it build out its portfolio of services beyond hardware. Today the company announced that it has taken a strategic investment in Cloudant — a specialist in cloud-based mobile enterprise solutions, specifically around the area of NoSQL and database-as-a-service technology. By way of an investment from In-Q-tel, Cloudant counts the CIA and other U.S. intelligence agencies among its backers, and customers. And, perhaps in keeping with what you might expect from a company that works with the CIA, the value of Samsung’s investment announced today has not been disclosed. @suryaray

How To Say No, And Other Tips From Inside SRI’s Venture Process

#SuryaRay #Surya Editor’s note: _Norman Winarsky is the Vice President of Ventures at research and technology development organization SRI International._ What have we learned over more than 65 years of invention and commercialization? There are several specific ways in which our venture processes stand in contrast to what is in vogue today. These are lessons that anyone in the business of innovation should consider. @suryaray

TechStars takes Chicago, merges with Excelerate Labs incubator program

#SuryaRay #Surya It’s been a big week for Boulder, Colo.-based TechStars. Just yesterday, the accelerator program said that it had chosen a new managing director for its New York City program. And on Friday, founder and CEO David Cohen announced that the company is setting up TechStars Chicago, by partnering with the local incubator Excelerate Labs.

Led by a group of entrepreneurs and venture capitalists, including SurePayroll founder Troy Henikoff, OkCupid founder Sam Yagan, Sandbox Industries’ Nick Rosa and New World Ventures’ Adam Koopersmith, Excelerator Labs launched three years ago and has established itself as a prominent part of Chicago’s growing startup community. In the past three years, the program said its 30 companies have raised a total of $30 million. But by becoming part of the national TechStars program, it could help elevate the local community and give founders access to TechStars’ larger network of mentors and entrepreneurs.

In a blog post, Cohen said he and TechStars cofounder Brad Feld had advised Henikoff and Yagan and had mentored companies in Excelerate Labs’ classes. He also said that he had personally invested in three Excelerate startups.

“As TechStars has expanded into new cities, we’ve always started our programs from scratch. But Excelerate made us think differently,” Cohen wrote. “We were so impressed with what they’ve built that we asked them to join forces with us and turn Excelerate Labs into TechStars Chicago. TechStars and Excelerate have always been kindred spirits: we both put entrepreneurs first and believe in the power of mentorship.”

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TechStars taps former NEA venture capitalist Eugene Chung to lead NYC program

#SuryaRay #Surya New York entrepreneurs, here’s a name you’re going to want to remember. On Thursday, startup accelerator TechStars announced that it had tapped Eugene Chung, a former venture capitalist with New Enterprise Associates, to lead its New York City program. He will replace David Tisch, the former managing director who helped build the New York program and stepped down last August.

“We interviewed thirty-five highly qualified candidates for this position and Eugene received our only offer. We are ecstatic that he accepted,” TechStars founder and CEO David Cohen said in a blog post.

Chung is already familiar with the New York startup scene, having helped manage NEA investments in companies like Buzzfeed and Bedrocket. He’s also served as a TechStars NYC mentor, working with companies like Poptip, Condition One, Wander and Pickie.

Interestingly, he seems to have a pretty varied professional background. Before becoming a venture capitalist, he was at Pixar Animation Studios, where he worked on hits like _The Incredibles_ and_ Up. _He’s also an indie film director and worked in the rural Philippines with global micro finance accelerator._ _Earlier in his career, he was an energy investor at Warburg Pincus and an investment banker at Morgan Stanley.

Since November, Nicole Glaros, the longtime managing director of TechStars’ Boulder, has been serving as the interim leader and she will continue to serve as co-managing director and work with Chung in New York through the next class, Cohen said.

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GAIN Fitness unbundles the exercise class with new platform – and new funding

#SuryaRay #Surya Plenty of new apps promise to put a personal trainer in your pocket, but GAIN Fitness doesn’t just want to offer quality workouts, it plans to provide a whole marketplace of them.

Since launching in 2011, the company said it’s logged about two million users (on the Web and iOS) and about 600,000 downloads.  From within its iPhone app, yogis, weight-lifters and other kinds of exercise enthusiasts have been able to purchase (for $1 to $7) workouts that include audio coaching from trainers, animated illustrations and video, personalization options and progress tracking.

But after two years of offering its workouts under one umbrella, founder and CEO Nick Gammell said GAIN Fitness plans to take a platform approach.

“Fitness is an industry of niches,” said Gammell, who formerly worked at Google. And while GAIN’s initial course was to aggregate the different markets, “in the past year, we’ve focused on creating a tech platform and features that can be useful across different types of fitness instruction,” Gammell continued.

In addition to launching the new marketplace on its website, Gammell also said the company had raised $550,000 on top of the $650,000 round it had previously announced, bringing its total amount raised to $1.2 million. Funders include InterWest Partners, former Square COO Keith Rabois and Practice Fusion co-founder Matthew Douglass.

With its new platform strategy, GAIN won’t focus on promoting its own line of exercise apps but partner with other fitness experts, training centers and franchises to provide the underlying technology for their content.  For example, it’s created a basketball app with the Peak Performance Project in Santa Barbara, Calif. and a weight-training app with DF Keifer, a nutrition and training expert. Soon, the workouts won’t just be available as in-app purchases, but as stand-alone apps in Apple’s app store.

GAIN’s pitch to potential partners is that with its technology, it can provide a higher quality app in less time and with more exposure. Each deal is different, Gammell said, but they all include a revenue share and co-marketing.  So far, it’s attracted five partners but it plans to release a new app every month going forward.  And its pricing strategy could entice partners reluctant to cheapen their products in an App marketplace that favors apps in the $1 to $2 range.

Instead of charging users a subscription fee or a higher flat fee, GAIN lets people pick and choose the kinds of exercises they want, a la carte. For example, aspiring yogis can pay $6.99 for a basic yoga class and then purchase additional $3.99 “packs” on balance, strength or focus areas.  Strength trainers can purchase packs that target their glutes or abs, or push them to a higher level.

For users who want a convenient way to exercise while traveling or coping with a busy schedule, GAIN provides the ability to buy and customize the content most relevant to their level and goals. And for companies and franchises that have made their names with pricey offline classes or cheaper (but still potentially pricey) DVDs, the company’s approach could be a way to reach a greater audience.

GAIN will have to prove to consumers that its paid apps are better than other free and lower-priced options out there. And it will need to convince more “celebrities,” popular trainers and organizations to join its site (which could be a challenge if companies have deep enough pockets and think their brand is big enough to stand alone). But given the rise of quantified self-type tracking devices, like the Fitbit and Nike Fuelband, it’s clear that consumer interest in fitness-related technology is growing. It seems only natural that they’d have a strong appetite for quality mobile fitness content as well. @suryaray

Nokia Growth Partners Launches Third Fund Backed By $250M From Nokia, Expands In China

#SuryaRay #Surya Nokia’s venture capital arm Nokia Growth Partners (NGP), which was founded back in 2005 and invests in mobile-related ventures in the U.S., Europe and Asia, has launched its third fund — back by a further $250 million long term commitment from Nokia. The VC firm is also expanding its presence in China with the appointments of David Tang as MD and Lu Guo as principal. @suryaray

Sand Hill Road’s True Belieber

#SuryaRay #Surya Scott Hartley, a venture capitalist at Mohr Davidow, decided to completely overhaul his investment strategy today after returning from a trip to New York. Hartley, who is originally from Palo Alto, spent a few days in New York for meetings and an interview on Bloomberg TV. When he unlocked his Sand Hill Road office today, he found that his colleague Abhas Gupta had cheerfully Bieberized his new desk on the other side of Mohr Davidow’s office. While at first he was shocked, with a little reflection, it sunk in that the mobile-social wave is over, and that while enterprise is cool, the next wave of disruption is Bieber. “I have a belief that ‘Tech is a Horizontal Enablement Layer‘ that disrupts traditional verticals,” he said. “First, we saw this with the Internet in the 90s, then with mobile as a dominant form factor, and social as a proxy toward authenticity. We believe that the next wave will include Bieber, and we are well positioned in this space.” His colleagues and the firm’s LPs, while stunned by this sudden pivot, were understanding and said they felt confident in Hartley’s abilities to identify the very best early-stage teams in this new Bieberification wave. “The question is how will Bieber disrupt traditional verticals,” he said. “We’re investors in RockHealth, pioneers in the digital health category, and we’re actively seeking opportunities in the vertical disruption Bieber is applying on Sand Hill Road.” He’s now working on partnering with Y-Bieber-cubator to source deal flow on companies that have evidence of Bieber-gagement and Bieber-tention. He added: If I was your VC, I’d never let you go I can scale you places you ain’t never been before Baby take a chance or you’ll never ever know I got money in my hands that I’d really like to blow Swag swag swag, on you @suryaray

ER Accelerator Announces 10 Startups Joining Its January 2013 Class

#SuryaRay #Surya It’s a brand new year, and a brand new class for the Entrepreneurs’ Roundtable Accelerator is only fitting on this cold, January morning. The accelerator announced back in October that this January 2013 class of ten startups will be receiving a $15K boost to their seed funding, a total of $40K per startup. According to Jon Axelrod, managing director at ERA, “We really believe that extra $15,000 can really make a difference.” Past classes only received $25K in funding, along with resources like mentors, office space, bandwidth and a demo day in front of investors. @suryaray