Venture Hacks

Launch: AngelList, a curated list of angel investors by Nivi on February 2nd, 2010

I’m psyched to announce AngelList, a curated list of super high-quality angel investors. And how to reach them. Investors like Jeff Clavier, Dave McClure, Rob Hayes, Aaron Patzer, Brad Feld, and 50 other investors have already joined. I want to thank all of the angels for taking the time to fill out these extensive profiles. And it’s not fair for me to list just a few of the investors here — they’re all awesome. You should click and browse the entire AngelList. Together, they represent $80M that will be invested in early-stage startups this year. Angels: How to join AngelList If you’re an angel investor, apply to join AngelList here. At a minimum, you should have made two $25K angel investments in 2009 and plan to make two more $25K investments in 2010. Startups: How to contact the angels Read an angel’s profile before you try to get in touch with him. All the angels have listed how many investments they expect to make this year, their typical investment amount, the markets they invest in, how to get intros, and lots more information you can’t find anywhere else. Some of the investors let you contact them directly. But, before you do, build a minimum viable product and learn something about your customers by putting it in front of them. If you can’t get that far on your own, go find some idea investors instead. Then send the angels an amazing 150-word elevator pitch. Don’t send them nonsense. Angels talk to each other and they talk to me. Your reputation is all you’ve got — so please follow our suggestions in the previous paragraph. And — stay tuned — we’re announcing a sweet new way to reach AngelList soon. Get AngelList updates Get notified about new angels on AngelList via RSS or Twitter. And here’s a Twitter list of the angels on AngelList: Anatomy of an (un)fundable startup by Nivi on June 22nd, 2011 Naval and Mark Suster recently gave the keynotes at the 7th Founder Showcase. Andrew Chen did a better job of describing Naval’s keynote than I ever will: “People spend a surprising amount of time on things that will contribute little or no value to getting them to a seed round, and this talk is the best I’ve seen in terms of presenting the issues in its entirety. “Naval broke down the 5 main qualities of an ‘exceptional startup,’ in the following order: 1. Traction 2. Team 3. Product 4. Social Proof 5. Pitch/Presentation “And while all these qualities are important, Naval explained, the most important thing is to understand that: ‘Investors are trying to find the exceptional outcomes, so they are looking for something exceptional about the company. Instead of trying to do everything well (traction, team, product, social proof, pitch, etc.), do one thing exceptionally. As a startup you have to be exceptional in at least one regard.’”

Anatomy of a (un)fundable startup from Venture Hacks

Chris Dixon is not only joining Andreessen Horowitz; he’s leaving New York By Sarah Lacy On November 19, 2012 Chris Dixon has long been one of the most vocal advocates of the New York tech scene. He’s heavily involved with HackNY a program that promises to “keep kids off the street” — Wall Street that is. When he sold his latest company, Hunch, to eBay one of the big plusses was that eBay was going to build out a huge campus in New York complete with hot-desking options for local entrepreneurs and an auditorium for a speaker series. And when I once suggested to Fred Wilson over lunch that he was the godfather of New York. He replied, “Well, if I’m the Godfather, Chris Dixon is clearly my number two.” Not anymore. Dixon is moving to Menlo Park as a condition of his new– enviable– job as the newest general partner at Andreessen Horowitz. It’s not that Andreessen Horowitz doesn’t believe in New York– three of its biggest deals are there in FourSquare, Fab and Quirky. But Andreessen Horowitz and Benchmark Capital are perhaps two of the only mega firms left who avowedly refuse to expand beyond Sand Hill Road. “We are a single office firm,” Marc Andreessen says. “We take teamwork really seriously, and it’s a big deal to have everyone in the same place.” Dixon is clearly conflicted about it. “You could think of it two ways,” he says, trying to avoid just the kind of story I’m writing. “You can think of it as I’m abandoning New York or I’m beginning the process of bringing the best venture firm in the country back to New York. I like to think of it as the latter.”

That may be how he likes to think of it, but if I were the New York ecosystem, I wouldn’t be holding my breath for a local AH office anytime soon. But no doubt Dixon will be an advocate for New York startups, particularly the ones he’s already invested in that may be soon seeking a series A. He has about 50 active companies in his portfolio, and some thirty were new investments made in the last year, he says. Dixon, personally, will still be spending a good deal of time in New York, and hopes to live there again one day. He emphasizes that he’s keeping his apartment in New York and will be back and forth a lot. That said, he also says that he knew he wanted to focus the next phase of his career on investing, not starting another company. And he’s long admired Andreessen Horowitz’s model of investing. “I’d be nuts not to take this job,” he says. And, he adds, like it or not, the bulk of the activity is still in the Valley. Cheerleading aside, roughly two-thirds of his angel portfolio was already in California. This move will effectively bring him closer to even his existing portfolio. “The reality is New York is doing well and growing but is still significantly smaller than California,” he says. “If I was going to start another company, I’d argue I could be anywhere as long as I can hire developers. But if you are going to do venture capital at scale, it’s clear to me that California is where you want to be based.” I should disclose that both Andreessen and Dixon are personal investors in PandoDaily, and two of the first calls I make when I need advice. I know from experience that they’re remarkably similar in how they approach the business of investing. Both have experience in enterprise and consumer, and both think about deals in terms of big trends playing out in the industry– not simply getting lathered up about a cool feature or app. I’ve seen both be vociferous advocates of entrepreneurs even when it puts them at odds with fellow investors. But similarities aside, Dixon will bring a decidedly new energy, brand and background to Andreessen Horowitz. All of the GPs are operators, but they are currently heavy on sales and public company experience. Sure Ben Horowitz has his edgy blog posts, but there is nary a regular Tweeter among them. None represent the voice of the edgy super angel class or the young entrepreneur. Dixon does both, but has the operational chops and experience so that he’s not just that. “I think he’s the best of that new breed of angels,” Andreessen says. “We already have a number of people who have run big companies employing thousands of people– we have that covered. If anything Chris has just avoided that emotional scarring.” Case in point: Dixon asked if Andreessen Horowitz had some laptop stickers so he could #humblebrag about his new gig by putting one on his laptop. “Stickers?” Andreessen literally didn’t know what he was talking about. “Entrepreneurs put them on laptops, and it’s great because it looks like they think you’re cool,” Dixon explains. “That’s an East Coast thing. No one would dare sully Jony Ives’ design out here,” Andreessen says. The deal represents another milestone for the firm too: Once-wunderkind Andreessen is no longer the youngest general partner at the firm. Sarah Lacy is the founder and editor-in-chief of PandoDaily. She is an award winning journalist and author of two critically acclaimed books, "Once You're Lucky, Twice You're Good: The Rebirth of Silicon Valley and the Rise of Web 2.0" (Gotham Books, May 2008) and "Brilliant, Crazy, Cocky: How the Top 1% of Entrepreneurs Profit from Global Chaos" (Wiley, February 2011). She has been covering technology news for over 15 years, most recently as a senior editor for TechCrunch.

Joel Spolsky Great Advice Tips on Starting a Company

WSJ - 2011/2012 Top 50 Start-ups

By COLLEEN DEBAISE And SCOTT AUSTIN Venture capitalists are betting that the next Google Inc. GOOG -0.20%or Facebook Inc. will have a name like Xactly, Chegg or Zoosk.

In what may be a sign of a re-inflating Web bubble, The Wall Street Journal's second annual ranking of 50 venture-capital-backed companies shows investors are chasing after Internet firms, many with a consumer focus. Makers of Web-based software like Xactly Corp., e-commerce sites like Chegg Inc. and social services like Zoosk Inc. pepper the list. It also features four online publishers and two makers of social-networking tools for businesses. Bloomberg News Chegg Inc., a textbook-rental service, moved up one notch on the list to No. 31. . Even those firms in fields without a particular tech focus, such as health care or business services, have incorporated social-networking or mobile technology into their offerings or business models. To be eligible for the ranking—compiled by research firm VentureSource, a unit of Wall Street Journal owner News Corp NWS -0.25%.—companies must have received an equity round of financing in the past three years and be valued at less than $1 billion, as the aim is to identify lesser-known contenders. That excludes a number of prominent companies, including Facebook, Twitter and Groupon Inc. Some 5,743 candidates were considered. The Wall Street Journal's list of the top 50 startup companies of 2011 is just out. Colleen DeBaise takes a look at the three firms that topped the list and the reasons came out ahead of the pack. . For the second straight year, a health-care company tops the list: Castlight Health Inc., a San Francisco firm whose technology allows consumers to run side-by-side comparisons of out-of-pocket medical expenses. The three-year-old company, formerly known as Ventana Health Services Inc., was No. 14 on last year's list. It takes the top spot from Pacific Biosciences Inc., a genetic-sequencing technology firm that went public in October. Start-ups with potential for technological breakthroughs in health care, mobile communications and business software topped The Wall Street Journal's second annual Next Big Thing list. Castlight, like others on the list, is trying to modernize various aspects of health care, an area that is benefiting from federal stimulus spending. No. 18 PatientSafe Solutions Inc. has designed a patient-safety system for Apple Inc.'s AAPL -0.61%iPod Touch, while No. 32 Everyday Health Inc. runs a network of health websites. Castlight scored high marks for raising $80 million from some big-name investors, including Oak Investment Partners and U.S. Venture Partners.and Venrock Many companies on the list are in the long-established IT category that venture capitalists have traditionally put their money into. For instance, the top 10 include companies that provide wireless infrastructure or data-management services. Xirrus Inc. earned the No. 2 spot. The provider of Wi-Fi technology made the cut in part because founder Dirk Gates previously took another high-tech start-up, Xircom Inc., public and then sold it to Intel Corp. INTC +0.92% No. 3 on the list, Xactly, a software-as-a-service company that provides sales-compensation tools, has partnered with heavyweights Microsoft Corp., MSFT +1.40%Oracle Corp. ORCL -0.14%and Salesforce.com Inc., CRM +0.13%which invested in the company last June. Several consumer Internet start-ups moved up the list, or joined it for the first time, showing the surge in valuations for anything dot-com. Among those moving higher: No. 8 Glam Media Inc., a publisher of lifestyle websites; No. 12 Etsy Inc., an online crafts market; No. 29 Zoosk, a social-dating site; and No. 31 Chegg, a textbook-rental service. The Next Big Thing 2011 Revisiting Last Year's Top 50 Venture-Backed Companies Veteran Investor Defends Start-Up Boom Which VC Firms Hold Top Bragging Rights? Methodology of Top 50 List Two firms that make social-networking tools for businesses made the list. No. 26 Jive Software Inc. is backed in part by Kleiner Perkins Caufield & Byers, which invested in Facebook and Twitter. No. 46 Yammer Inc.'s investors include Founders Fund, which bet early on Facebook, and Charles River Ventures, one of Twitter's first backers. Some companies on last year's list performed well enough to make the cut again this year, but lost ground in the rankings relative to their peers, highlighting the competitive nature of the survey. Solar-cell producer Suniva Inc. received better scores than last year but fell to No. 38 from No. 15. Silver Peak Systems Inc., a maker of data-center appliances, hasn't announced new equity funding since a $21 million round in early 2008, and slid to No. 44 from No. 20 partly as a result. Another company, Fusion-io Inc., a Salt Lake City-based maker of flash-memory drives, raised $45 million in new funding shortly after ranking at No. 2 last year, but it's now at No. 20 because its valuation grew more slowly than others on the list. On Wednesday, Fusion-io filed for a $150 million IPO. —Riva Richmond contributed to this article. Write to Colleen DeBaise at colleen.debaise@wsj.com and Scott Austin at scott.austin@dowjones.com

By ANGUS LOTEN How did last year's contenders in the "Next Big Thing" list fare after they were revealed in March 2011? The Full Rankings Start-ups with potential for technological breakthroughs topped The Wall Street Journal's third annual "Next Big Thing" list. The Wall Street Journal's third annual ranking of the top 50 venture-capital-backed companies shows a crop of contenders that overall are focused less on online consumers than in years' past. Emily Maltby has details on The News Hub. Photo: Cheezburger Inc. . During a period of world-wide financial instability—from the nation's downbeat economic news to the European debt crisis—most of the companies on the 2011 list have remained unscathed, if not prosperous. Six of the companies, or about 12% of the list, held initial public offerings, while another two filed papers to go public. Four companies were acquired, and the other 38 are still privately backed, including No. 1 Castlight Health Inc., a medical-software firm. At least one company didn't have such a positive fate, however—No. 50 Aprius Inc. shut its doors, underscoring the difficulties for venture capitalists in predicting which start-ups have the greatest potential to succeed. About three-quarters of venture-backed firms in the U.S. don't return investors' capital, according to recent research. With prices for flash memory falling, Aprius struggled to find a market for its main product, a device whose selling point was bringing down the cost of flash storage for servers. Since launching in 2007, Aprius had raised $31 million in funding. Among the most high-profile IPOs from the ranking was No. 20 Fusion-io Inc., FIO +4.78%a maker of flash-memory drives for servers whose chief scientist is Apple Inc. AAPL -0.61%co-founder Steve Wozniak. The company, which made the list two years in a row, held its IPO in June 2011. The stock has since risen about 71%, pushing its market capitalization to about $2.85 billion. The Wall Street Journal reveals its third annual ranking of the top 50 start-ups in the U.S. backed by venture capitalists. More on The Next Big Thing 2012 Read more on our selected startups and how we arrived at the rankings: Looking for the 'Next Big Thing'? Ranking the Top 50 Start-Ups Internet Funding Boom Ends as Fast as It Began Picking the Winners Media Firm Specializes in Humor Web Sites Genband's Technology Makes It a Winner The Methodology Behind 'The Next Big Thing' . Outperforming Fusion-io on the stock market is No. 49 ServiceNow Inc., NOW +3.78%which held one of the first tech IPOs since Facebook Inc.'s FB +1.34%offering. The cloud-computing company's shares have nearly quadrupled since the June IPO, giving it a value of almost $5 billion. Other IPOs include No. 10 Imperva Inc., IMPV -0.80%a provider of data security and audit systems; No. 16 Active Network Inc., ACTV +1.94%which offers an online registration platform; No. 26 Jive Software Inc., JIVE -0.06%provider of social-networking software for businesses; and No. 40 ExactTarget Inc., ET +3.63%an email marketing provider. Last month, payroll software firm Workday Inc., No. 24 on last year's list, filed for a $400 million IPO after revenue more than doubled to $119.5 million for the first six months of the year. And cancer-drug developer OncoMed Pharmaceuticals Inc., ranked No. 41, filed for a $115 million IPO in May. The Top 10 Venture-Backed Companies A closer look at the companies that topped this year's Next Big Thing list. These companies weren't the only ones poised to deliver investment returns to their venture-capital investors in the past year. Four of the firms on last year's list were acquired, including Yammer Inc., Aster Data Systems Inc., TxVia Inc. and Xsigo Systems Inc. In the biggest deal, No. 46 Yammer, a maker of business social-networking software and a competitor of Jive Software, agreed in June to be acquired by Microsoft Corp. MSFT +1.40%for $1.2 billion in cash. Yammer raised about $142 million from venture-capital investors. Other deal prices were closer to earth. In March 2011, San Carlos, Calif.-based data analytics firm Aster Data Systems, ranked No. 7, was acquired by Teradata Corp. TDC +1.05%for $263 million. In April this year, TxVia, a New York-based payments technology company, which ranked No. 48, was acquired by Google to boost its mobile payment tool, dubbed Google Wallet. The terms of the sale weren't disclosed. Three months later, Oracle acquired Xsigo, ranked No. 33, a hardware and software maker for data centers, for an undisclosed price. As many as 28 of the 50 top venture-backed firms in 2011 have since raised additional equity financing, according to Dow Jones VentureSource, which, like The Wall Street Journal, is owned by News Corp. NWSA -0.15%Those funded companies include Castlight Health, which in May announced $100 million in new financing, the most raised by any of the top ranked firms in the past year. Coming in a close second, Workday Inc. closed $85 million in a funding round in October led by T. Rowe Price TROW +1.95%and Morgan Stanley Investment Management. —Scott Denne contributed to this article. Write to Angus Loten at angus.loten@wsj.com

Wufoo-Sounds Like a Smart Deal!

It's been a while! Let's see what we can catch up on in the first quarter of 2013. Revamping BLOG and new web site. Happy New Year Lu'na Another Y Combinator Win: WuFoo Exits For $35 Million, After Raising Only $118,000 Erick Schonfeld Monday, April 25th, 2011

Online forms are not sexy, but every Website that wants to collect information or payments from visitors needs them. Today, SurveyMonkey acquired online form maker WuFoo to its growing bevy of tools for $35 million in cash and stock. I’ve confirmed the price with a source. What’s really great about this story is that WuFoo is another Y Combinator win. The startup launched way back in 2006 with only $118,000 in angel money (Paul Bucheit, who is now a partner at Y Combinator, was one of the investors). The company never needed to raise money again. It added payment processing options a couple years later, and now more than $100 million in transactions have been processed through its forms. SurveyMonkey should be able to ramp that up considerably. It will add WuFoo to other recent acquisitions ClickTools and Precision Polling. SurveyMonkey is on a buying spree after raising $100 million in debt last November. Expect more acquisitions to round out its offerings.