Just Raised- 04/19/2022
By Alan Soclof
3 BIG STORIES
1. PayPal’s (Almost) Bankruptcy?
Pictured: Elon Musk (Left), David Sacks (Middle), Peter Thiel (Right)
Fast, the one-click checkout company, closing their doors a couple weeks back sent shockwaves through the VC world. What many do not know is that in 2000, PayPal nearly shared the same fate.
David Sacks, the former founding COO of PayPal and current General Partner at Craft Ventures, shared this on the All-In podcast:
“Paypal had this situation back in 2000, right after the dot-com crash. We were burning 10 mill a month like Fast. We had no revenue and no business model. We said the service would always be free. We had four months of life and pulled up on the throttle and introduced paid accounts. We started charging transaction fees, cut the cost structure of the company and we made that last 40 million dollars last a lot longer than four months.”
How wild is it that one of the greatest companies in the world almost became just another victim of the dot-com bubble? This would have meant no PayPal (obviously), Venmo, or maybe even the rise of Elon Musk.
But that did not happen.
The best entrepreneurs and founders know everything about their businesses inside and out, especially their finances and runway. In the face of adversity, they are bold. They are willing to take risks and pivot. They view a possibly fatal challenge as a career-defining opportunity.
In many ways, PayPal became the company they are due to these tough times. The macro environment instilled a sense of urgency and required the company to get lean, re-think their business model, and generate revenue.
My challenge to all founders would be to put yourself in the shoes of a company like PayPal. Be lean, think outside of the box, and create a sense of urgency—before reality makes you.
2. An Angel’s Wishlist
AngelList announced the launch of “Wishlist,” a feature where you can create a list of your favorite private companies and get alerted if someone in AngelList’s network is looking to sell their stake.
This news comes a month after AngelList announced a $100M raise @ a $4B valuation led by Tiger Global and Accomplice.
Who does this move mean trouble for?
As discussed in Newsletter #10, Forge (who recently SPAC’d) is a company looking to make trading (more like buying and selling) in the private markets as easy as trading in the public markets. The issue for Forge is that they are a strict marketplace and not an ecosystem.
AngelList, on the other hand, is a massive hub for making investments for VCs. Check out these 2021 stats for AngelList:
- $3.6B invested in funds and syndicates
- 800+ VCs running funds and syndicates
- 11K investments made by VCs
WIth an ecosystem this vast, if AngelList can build this product out successfully, why would VCs or other investors go to a third-party platform to buy or sell stakes in companies when they can do it “in house?”
Prediction: AngelList will be a big winner here, but there will also be others; I just don’t think Forge is one of them.
3. Pax8’s Global Ambitions
Pax8, the leading cloud marketplace for SMBs, announced a $185M funding round @ a $1.7B valuation led by SoftBank Vision Fund 2.
Pax8 has been on a tear over the past couple of years and is now working with over 200K businesses and 20K managed service partners.
The company also has a significant customer success team that works closely with SMBs and creates asynchronous training courses and peer learning groups—all differentiating, key components to their success.
What excites me the most about Pax8?
The methodical, disciplined approach to growth.
Pax8 started off by building a powerful engine domestically that saw more than 2,000% revenue growth over the past 3 years. Only this past year did the company look to expand internationally though the acquisitions of:
- Rosello – cloud service distributor with a presence in 40 European countries with agents who speak 15 languages natively
- WireHive – UK-focused cloud service distributor that has now rebranded to WireHive UK
Both acquisitions emphasize cultural fits, logical expansions, and customer-first thinking.
What they are doing appears so simple and obvious but as the great Charlie Munger says, “Common sense is not common.”
Also, the company announced yesterday the hiring of new CFO Puneet Pamnani. Puneet was the CFO of Kore Wireless, a SaaS provider of IoT that Pamnani helped take public.
Pax8 is a beast.
CHART OF THE DAY
Security = Expensive!
I decided to spice things up a little bit today and include this interesting chart. How wild is $25.2M in security detailing for Zuck? Plus a $9M team for Sandberg!
Maybe they should give Parag a call and ask what security service Twitter is using.
What They Do: Creator-focused banking
Amount Raised: $15M Series A
Lead Investors: Acrew Capital
The Rundown: Creative Juice is a one-stop shop for the creator with various tools including business loans, tracking various revenue streams, filling out taxes, and more.
The company also announced the raise of $50M to the Juice Fund, a fund that invests in various creators and their related companies. Legendary YouTube creator Mr. Beast has worked closely with Creative Juice since launch and is an investor in the company.
What They Do: Looking to make employee benefits more personal
Amount Raised: $13M Series A
Lead Investors: Battery Ventures
The Rundown: Compt looks to change the way employees receive their benefits and make it more personal. Compt envisions a world where your benefits are in broad categories with dollar allocations vs. specific hardcaps targeted toward certain brands.
The company is on fire: ARR grew by 500% in 2021 and they have gross margins of 97%!
What They Do: Property software management for landlords
Amount Raised: $12M Series A
Lead Investors: K1 Investment Management
The Rundown: RentRedi has created an all-in-one property management platform accessible anytime and anywhere for owners, both on the web and on a mobile app.
In just the last two years, the company has added 10,000 actively subscribed landlords to the platform who manage over 85,000 properties.
What They Do: Enable homeowners to access their home equity
Amount Raised: $5.8M seed round, $1B in financing
Lead Investors: Gemini Investors
The Rundown: Splitero is a PropTech company that looks to help homeowners access their equity in their homes to help combat inflation and rising home expenses.
The company is currently launching in California but has plans for a nationwide launch in the future.
What They Do: Mobile-first employee training platform
Amount Raised: $2M seed round
Lead Investors: Gutter Capital
The Rundown: Classic employee training/education platforms require hours at a desk. Opus is changing this by creating a mobile-first platform with micro-lessons that specifically target “frontline workers,” like those in restaurants, retail, construction, etc.
Opus’s approach has gained serious traction. Opus app engagement is over 85% of registered employees. Also, the time from signup to lesson is less than 60 seconds.
Q: What is the nickname for the former PayPal employees who went on to build some of the greatest tech companies?
Here are three of my favorite jobs from the startup/VC world today. Click here to post a job on the Just Raised Job Board and get it featured.
Novel is a company enabling brands to create NFTs with a no-code solution. After raising a $6M seed round, the company is looking for a Director of Marketing to lead the marketing push as the company scales. What is the best part about Novel? The product is already available on the Shopify platform as a plug-in for brands, which should lead to explosive growth for the company!
Sydecar is building tools to automate back-office operations for venture investors so they can focus on making deals instead of spreadsheets and legal documentation. After leaving stealth last month and raising an $8.3M seed round, the company is looking for a content & community manager. What’s a better gig than managing the social media presence for a company disrupting the VC landscape?
Grain is changing Zoom meetings as we know it by recording, transcribing, and creating “highlight reels” of company Zoom calls. How cool does that sound? With $20M behind them, Grain is looking to hire a Sales Development Rep to generate more inbound leads for the company and ultimately acquire new customers. Best part about the gig? A clear promotion path to an Account Executive role.View More →
- I feel about 10x smarter after listening to this podcast interview with Marc Andreesen.
- Loved hearing the All-In podcast’s thoughts on Elon Musk and Twitter. This podcast is quickly becoming a part of my weekly routine.
- This country just loves football. The USFL’s opening week had almost as many viewers as the NBA’s weekly marquee matchup on ABC (3.04M vs. 3.00M). Wild.
- This New York Times article on Beta Technologies, the Vermont based VTOL company, was a great read!