Remember when the news came that venture capitalists were open to business? Or when Zoom investing was only done by that one boy in Ann Arbor (ah, just kidding!)? These past few months have felt busier than ever, with no holiday slowdown in sight when it comes to startup growth, hot IPOs, and new financing.
Even with a distracting bull market, I wanted to reflect and see how younger startups are doing. Alex Wilhem and I dove into the data, provided by Pitchbook, to see if the next DoorDashes is Airbnbs they are getting their first funding.
The answer is that seed investment has flourished but in a complicated way. COVID-19 has rocked startups that were considered attractive by private investors. And that change has put certain sectors and people at risk.
Here's how two investors explained the dynamics:
Jenny Lefcourt from Freestyle:
I think the prices of seeds are being pushed higher [venture] companies that play before and feel like they can't afford to lose the next DoorDash. I think bigger companies have so much capital to put to work and feel it's better to burn some [cash] to suit for the benefit of being in the right [startups] where they can double, triple, 10 times less than the winners.
Nihal Mehta of Eniac Ventures:
Because you can't meet in person, investors felt much more comfortable investing in "proven" entrepreneurs who had. pre-existing connections to their social circle.
The long-term ramifications of this tunnel vision mean that the founders lost during this time, as the social circles in venture capital are largely white and male. From an industry perspective, e-commerce and edtech have struggled to grow, but at the expense of travel and hospitality.
The data brings a kind of dissonance to the land of startups: while seed investing has never seemed so challenging and fruitful, this is good news for some and bad news for others. It's a healthy reminder that boom and bust can be true at the same time.
How's it going for the 2020 approval? We're leaving next week, but in the meantime, two homework - take advantage of this Extra Crunch holiday sale and send me your suggestions and thoughts at [email protected] or tweet me @nmasc_ between one holiday and another.
I will chat with you all in the new year.
Edtech's biggest challenge in 2021
No industry has had a year as edtech. The industry has attracted $ 10 billion in funding globally, and distance learning has gone from a tool to a necessity.
Here are my favorite edtech stories I wrote this year:
Finally, in my end-of-year editorial for ProWellTech, I propose that the ubiquity of remote learning has certainly brought a boom to new users, but may actually have limited the industry's ability to innovate instead of a quick and easy scale.
Here's my biggest tip for the year ahead:
For edtech in 2020, flexible and piecemeal was a survival tactic that led to profits, growth, and most importantly, aha times when technology was needed in the way we learn. Now, as we enter the rest of the decade, the industry will have to shake off its short-term correction mindset to evolve from tunnel vision to far-reaching ambition.
A $ 16 billion checkbook for space startups
Funding space startups is challenging the odds, which is the poetic flair we need once in a while. As part of our TC Sessions: Space 2020 event, a number of ProWellTech reporters have dived deep into the kind of money that is going ... into space.
Chris Boshuizen of the venture company DCVC and a co-founder of Planet Labs in particular he said:
We don't live in the future of science fiction yet, where you can just fly, grab a piece of debris and bring it back. It's really, really hard - I think probably five years later - but something we want to support and see happen.
Remembering the startups we lost in 2020
Building a startup is always difficult, but the pandemic was a twist that led to a not-so-happy ending for many companies this year. So, as part of an annual ProWellTech tradition, we paid tribute to the startups we lost in 2020.
Here are my suggestions:
- This is not a funny list. Failure is difficult, but you can learn a thing or two when you divide the ashes. For example? Big names, big projects, and a lot of money are no substitute for making money.
- The list includes video app in short form Quibi, to the tech startup lawyer Lobby, to a slew of travel startups that fell apart as the virus dragged on.
- While some companies blamed COVID-19 failure, fundamental business cracks and holes had often sprung up long before the pandemic began.
Around ProWellTech
ProWellTech's Favorite Things of 2020 Gift Guide: Last-minute subscriptions to keep gifts going all year round Video: ProWellTech editors pick their best stories of 2020For the whole week
Seen on ProWellTech Snoop Dogg's Casa Verde Capital closes with $ 100 million as the cannabis industry recovers The usable activism platform helps users be proactive about the causes they love Letterhead wants to be the Shopify of email newsletters Telegram, nearly 500 million users, to start monetizing the app The Biden administration can change the world with new crypto regulations Seen on Extra Crunch With a $ 50 billion execution fee, can anyone stop AWS? Looking to the future after the epic M&A madness of 2020 Dear Sophie: What awaits us for US immigration in 2021? The built environment will be one of the next great technology platforms@EquityPod
Finally, Equity closes the year with two holiday episodes. This week we have some reflections on the year of the dumpster fire. I have collaborated with Danny, Chris is Alex to sit back and think about this eventful year. We also have five venture capitalists who have been able to leave their notes to us too.
The goal of this episode was to sit down and think about a year that no one could ever have predicted, but with a specific angle, as always, on venture capital and startups.
We asked about the biggest surprise, the non-portfolio companies to watch, and the wrong and right trends. There were also jokes about investing in Zoom (Alex invented Zesting, not me) and starting pricing.
Equity drops every Monday at 7:00 am PST and Thursday afternoon as fast as possible, so sign up for us on Apple Podcast, Overcast, Spotify, and all the casts.