Just Raised- 04/08/2022
By Alan Soclof
3 BIG STORIES
1. Elon Musk & Twitter
Unless you’re living under a rock, you probably know Elon Musk acquired a 9.3% stake in Twitter – making him the bird app’s largest individual shareholder. Twitter stock skyrocketed over 20% on the news.
Twitter CEO Parag Agrawal also announced that Musk would receive a seat on Twitter’s board.
Where do I even start?
Holyyyyyy Sh*t! That is how I start.
I also have so much to say and so little words so wish me luck. In my opinion, Musk buying this big of a stake in Twitter is one of the greatest flexes (Mom & Dad text me if you need a slang definition) in business history.
Many would agree that Twitter is the most powerful social media app/site yet the lack of monetization and its value ($5B in revenue and pre-Musk announcement $40B valuation) is shocking.
I think with this move, Musk will bring first hand perspective to the board of how he envisions the company monetizing the platform, specifically regarding people with large followings.
I think Musk will push Twitter to become even more personality/influencer/creator driven and look to monetize this. One free idea? Advertisers being able to sell ads for specific people’s pages and have the creator receive a cut of the ads.
Just imagine how much money someone would pay to advertise along with Elon’s tweets.
Prediction: Musk’s purchase and presence will help Twitter unlock the value of being the #1 social media platform.
2. Sequoia Capital’s Valentine
On Monday, Sequoia Capital announced that Sequoia partner Roelef Botha would be the successor to current managing partner Douglas Leone. Leone has been with Sequoia since 1988 and has been the sole managing partner for ~10 years.
Botha worked at PayPal in the early 2000’s where he rose to the ranks of CFO. After Ebay acquired PayPal in 2002, Botha joined Sequoia where he has been ever since and invested in Instagram, YouTube, and Square.
What does this transfer of power say about Sequoia?
Pictured: Roelef Botha
Instead of focusing on the direct implications of Botha’s big promotion, I want to step back and analyze the process that led to this decision which I feel founders, VCs, and angels can learn a ton from.
Sequoia is a world-class organization. To be a world class organization you need to have world class processes and practices.
Don Valentine, the original founder of Sequoia, instituted a firm rule that when the managing partner turns 65, they are forced to retire and find a successor. Valentine put this principle into practice himself when he handed over the reins of Sequoia to Leone and Mike Moritz in 1996.
This move highlights various principles including the importance of stepping back from your ego, recognizing success is due to a strong team and not one person, the importance of making room for the next generation and leaving a legacy that will live well on past your life.
How often do we all, myself included, think about the I in regards to our businesses.
True success comes from the we and not the I. If Don Valentine, one of the greatest from an industry not always known for humility, can make a move like this, we should look to incorporate similar practices into our organizations as well.
3. Substack’s Techstack
Substack shared that they are jumping into the podcast wars and giving their writers the ability to create podcasts and put them behind a paywall/monetize if they so wish.
This is yet another aggressive move by Substack as they look to create a more complete media offering.
Just last month Substack announced that they would be launching an app that would host all of their newsletters, and now I assume, podcasts as well.
I love Substack and am incredibly grateful for them as in many ways I have my current job due to the intuitive, slick, and easy to use platform.
I actually like the strategic move that Substack made to build an app and now adding the podcast element makes even more sense. However, with Substack my #1 concern will always be, “Can they make money?”
From where I’m sitting, it appears they’re spending tons of money to build products and attract big name creators to their platform. For now, they can likely afford this burn, given their $65M funding round led by a16z last year.
Additionally, I am relatively bearish on the financial upside for podcasting in the current model. Yes, a ton of ad revenue will start flowing there, but unless the tech changes, you can literally skip over the ads in 3 clicks – speaking from experience! Substack will need to build revenue streams beyond advertising to become a profitable company.
Finally, I’m keeping my eye on beehiiv , a newsletter tech platform running a much leaner operation than Substack and cranking out features faster than anything I have seen in a while.
Plus, beehiiv has a larger vision of building an advertising marketplace. My partner in crime, Joe Sweeny, interviewed beehiiv CEO, Tyler Denk, about their big vision, on the Just Raised podcast – listen here.
Prediction: Substack’s next move will be creating/buying technology that will allow creators to connect directly with their followers for an hourly rate.
QUOTE OF THE DAY
“I am 100% behind my CEOs right up till the day I fire them.”
What They Do: Developer of first smart/connected pilates reformer
Amount Raised: $4M seed round
Lead Investors: ADvantage
The Rundown: Flexia is looking to bring pilates into your home through their connected reformer. Flexia’s reformer has embedded AI that gives real time feedback to its users as well as an online studio where people can stream classes from instructors.
Flexia’s biggest hurdle will likely be its cost where they are charging ~$3,500 per reformer!
(Fun Fact – I had a couple year run where I was really into pilates. Everyone needs a strong core!)
What They Do: Handles back office operations for venture investors allowing them to launch investment vehicles in minutes
Amount Raised: $8.3M seed round
Lead Investors: Deciens Capital
The Rundown: Sydecar is a company looking to modernize venture investing by handling the back office operations of what it takes running a fund. Whether it is the regulatory burdens, hassle free liquidity, or automatic banking Sydecar has you covered.
To date the company has already helped thousands of investors close over $350M in deals. Also – stay tuned because we might just have an interview with their CEO schedule in a couple of weeks!
What They Do: Helps brands create and mint NFTs
Amount Raised: $6M seed round
Lead Investors: Lerer Hippeau Ventures
The Rundown: Novel’s easy to use no code technology is sweet and the NFTs that brands that can create on the platform are beautiful.
The company interestingly charges $99 a month for their software and then 10% of the first sale and around 1% of transactions their after. Also, the company is already available as an app on Shopify which is big time.
What They Do: Use machine learning to change the way businesses and offices manage parking lots
Amount Raised: $4M seed round
Lead Investors: Third Prime
Why It Matters: Employers waste hours of time and hundreds of dollars annually looking for parking spots at large corporate offices and WayLeadr is using machine learning to change this.
Additionally, the company already has their eyes set on an autonomous vehicle future by looking to create solutions for consumers that will make the “last 10%” of the consumers journey fluid.
Before this raise, the company was profitable, and now with this warchest they are looking to reinvest in the company and grow its team from 25 to around 100 over the next 18 months.
The Bitcoin Company
What They Do: All-in-one solution for Bitcoin related services
Amount Raised: $2.1M seed round
Lead Investors: Prominent Bitcoin community members and various funds
Why It Matters: The Bitcoin Company is looking to create a rival to the legacy banking system structured around Bitcoin. This means that consumers can receive and send payments in Bitcoin, banking, exchange services, receive “Bitcoinback” services, etc.
This is a very interesting company to watch as BTC looks to become mainstream. Also, love their name choice!