Apple doubles down with VC money

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This week’s highlights:

• 💰 Apple doubles down on minority investments

• 🛠️ When and Why to raise VC money

• 🌎 a16z makes a big bet on London

• 🤖 If VCs were animals…

Capital raised this week

Find out about all of the venture firms that raised capital in the past week.

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Harlem Capital, Vamos Ventures, and Collab Capital

These three firms receive $25M from Apple to continue investing in minority founders. (link)

Brown Venture Group

The Minneapolis firm just got one step closer to finishing out their $50M inaugural fund investing exclusively in Black, Latino, and Native American technology entrepreneurs. (link)

Voima Ventures

Nordic VC announces their third fund of €120M to invest in early-stage deeptech startups across the science sphere. (link)

Sugar Capital

Brian and Lisa Sugar, the husband and wife duo and founders of PopSugar raise their second fund to invest in the future of commerce. (link)

11 Tribe Ventures

Managing Partner, Mark Phillips, announced yesterday that the Chicago-based firm is raising its second fund. The fund is still open and has been filed as a 506(c), so if you are an accredited investor reading this, you can be an LP. (link)

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Neuvivo

Raises $11M to develop treatment for ALS. The round was led by GP of Primestreet Capital, Virit Vichitvadakan, and this marks their fund’s first investment. (link)

Medivis

Raises a $20M Series A round to advance surgery with augmented reality. The timing was right for Medivis, and they were able to get some notable investors in on the round. Thrive Capital led the round with additional investors including the Mayo Clinic, Disney CEO Bob Iger, and NBA superstar Kevin Durant. (link)

Weekly Resources

This week we want to help founders understand the fundraising process by highlighting why startups raise capital and when is the right time. Below is a summary written by our friends at Y Combinator on the subject.

Why

To put it bluntly, without funding the vast majority of startups will die. High-growth companies almost always need to burn capital to sustain their growth prior to achieving profitability. This is not to say that a few startup companies do successfully bootstrap (self-fund) themselves, but they are the exception.

Cash not only allows startups to live and grow, but it gives the company a war chest acting as a competitive advantage in all ways that matter: hiring key staff, public relations, marketing, and sales. Thus, most startups will almost certainly want to raise money.

When

Investors write checks when the idea they hear is compelling, when they are persuaded that the team of founders can realize its vision, and that the opportunity described is real and sufficiently large. When founders are ready to tell this story, they can raise money. And usually when you can raise money, you should.

For some founders it is enough to have a story and a reputation. However, for most it will require an idea, a product, and some amount of customer adoption, a.k.a. traction.

Therefore, founders should raise money when they have figured out what the market opportunity is and who the customer is, and when they have delivered a product that matches their needs and is being adopted at an interestingly rapid rate. How rapid is interesting? This depends, but a rate of 10% per week for several weeks is impressive.

How Much

Everyone’s situation is different, but as a general rule, you should aim at giving up 20% or less of your company for 12-18 months of runway. However, many prominent investors are now advising their portfolio companies to raise rounds that give them an extended runway of 24-36 months.

The process of raising capital is often long, arduous, complex, and ego deflating. Nevertheless, it is a path almost all companies and founders must walk. But on the bright side, this is a path even the most famous entrepreneurs in the world had to take. So hang in there!

Global Headlines

a16z opens first office outside the US

In recent weeks the SEC has been cracking down on crypto exchanges like Binance and Coinbase, filing lawsuits against them. What’s all this about? Essentially, the US government wants cryptocurrencies like Bitcoin to be classified as securities and be strictly regulated like any public stock would be.

So, with all of the uncertainty in the US, a16z is betting that the UK will be the crypto capital of the world, and they’re setting up shop in London. With the move, the firm will also open up a crypto startup school to mentor entrepreneurs and find new talent in the space. (link)

Tesla is making moves

Coincidentally, just a few weeks after Elon Musk steps down as CEO of Twitter, things start going Tesla’s way. Tesla created the North American Charging Standard (NACS) which now has a vast supercharging network of 22,128 superchargers across the continent. They recently opened up this network for other EVs to use, and already Ford, GM, and Rivian have announced their adoption of the NACS. This move also opens to doors for Tesla to receive billions of dollars in federal subsidies as announced by the White House. Furthermore, Texas announced that they will require all electric charging companies to include Tesla’s NACS to qualify for federal funds.

The company is also looking to expand internationally into India, with Elon meeting Prime Minister Narendra Modi yesterday. Elon said the meeting went very well, and he is expecting a significant investment in the country. He also spoke on the promise of bringing Starlink to India but did not provide a specific timeline. (link)

Battle Royale: The AI Showdown

Last week, we were curious about what the models had to say about the future of VC. Specifically, we wondered which industries the models thought would be attractive for investors in the coming decade. Chat GPT thought renewable energy while Bard argued for Healthcare.

This week, we are going to have a little fun with it…

Prompt

If venture capitalists were animals in a jungle, what would they be and how would they hunt for investment opportunities?

Chat GPT

1. Cheetah 😾

   Venture capitalists, like cheetahs, are known for their speed and agility. They would hunt for investment opportunities by quickly scanning the landscape, identifying potential targets, and swiftly pouncing on the most promising ones before anyone else can seize them.

2. Hawk 🦅

   Similar to hawks soaring high above, venture capitalists would have a bird's-eye view of the market. They would diligently survey the jungle from above, scanning for potential investment opportunities. Once they spot a suitable target, they swoop down swiftly to secure the investment.

3. Spider 🕷️

   Venture capitalists resembling spiders would patiently spin their investment webs, strategically placing traps and waiting for startups and entrepreneurs to stumble into their network. They meticulously research, network, and create connections to capture promising investment opportunities.

4. Dolphin 🐬

   Agile and intelligent, venture capitalists acting as dolphins would dive deep into the investment ocean, exploring different sectors and markets. They would use their acute senses and communication skills to identify startups with potential and collaborate with other investors to make a big splash in the venture capital ecosystem.

5. Lion 🦁

   Similar to the king of the jungle, venture capitalists embodying lions exude strength, authority, and leadership. They establish a powerful presence in the investment landscape and have a keen eye for spotting potential opportunities. They meticulously analyze the market, conduct due diligence, and eventually strike with precision and confidence.

6. Octopus 🐙

   Venture capitalists taking the form of octopuses would have multiple tentacles, each reaching out in different directions to explore various industries and geographies. They possess exceptional adaptability and flexibility, using their extended reach to discover hidden investment gems that others might overlook.

7. Owl 🦉

   Venture capitalists resembling owls are wise and observant creatures. They would spend hours silently perched on branches, attentively listening and watching for the rustling sounds of promising investment opportunities. When they spot potential, they swiftly swoop in and seize the chance to make strategic investments.

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