Product Management Confabulation
What Product Managers are talking about.
Lacey Hunter thought all was well as she put her startup through the three-month Newchip accelerator. Then the organization filed for bankruptcy in May 2023. Things went from bad to worse later that year when she discovered warrants of her company — rights to buy an ownership stake — had become part of the proceedings, […]
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Betaworks is embracing the AI trend not with yet another LLM, but instead a clutch of agent-type models automating everyday tasks that nevertheless aren’t so simple to define. The investor’s latest “Camp” incubator trained up and funded 9 AI agent startups they hope will take on today’s more tedious tasks. The use cases for many […]
© 2024 TechCrunch. All rights reserved. For personal use only.
Startup accelerator Techstars is raising $150 million for its new fund, SEC filings show. The accelerator is seeking new capital ahead of the end of the deployment period of its third institutionally-backed fund, Techstars Accelerator 2021, later this year.
Techstars declined to offer details on how it intends to use or deploy the funding, citing regulatory restrictions. However, like its predecessors, the new fund, Techstars Accelerator 2024, is expected to be used for accelerator-stage and/or post-accelerator investments.
Notably, the Boulder-based early-stage investor has used its current fund only for accelerator-stage investments. Its previous funds backed startups both during the accelerator stage and with follow-on investments after the program.
Fund 3 aimed to back over 800 pre-seed and seed startups that are part of its global accelerator programs by the end of 2023. Through its accelerator groups, Techstars has so far backed over 3,500 early-stage startups in various sectors including healthtech, fintech, web3 and cleantech.
Startups going through Techstars’ three-month program receive $20,000 and a $100,000 convertible note in exchange for 6% to 9% of common stock, in addition to access to its network and mentorship, amongst other resources.
Founded in 2006, Techstars runs over 50 accelerator groups in major cities across the globe, including New York, Los Angeles, London, Boston, Tel Aviv and Lagos. The accelerator launched the Lagos arm last year in partnership with ARM Labs as part of its plan to expand its specialist and generalist programs globally.
To double down on its growth and expansion plans, Techstars recently launched new funds to bolster its investment efforts.
Last year, for instance, it launched Rising Stars, a fund to back startups that are too early for its accelerator programs. Under this fund, Techstars will issue $100,000 checks in exchange for 7% to 10% equity.
The accelerator also launched the $80 million Advancing Cities Fund in partnership with JPMorgan to back over 400 startups by diverse founders in nine cities across the U.S.
Techstars raising $150 million for new accelerator fund by Annie Njanja originally published on TechCrunch
Better Tomorrow Ventures’ Sheel Mohnot landed some of his biggest wins before he ever started a venture firm. The investor previously worked as a partner at 500, previously known as 500 Startups, where he raised and ran a dedicated fintech fund as well as helped build an accelerator.
There he met his eventual founding partner at BTV – Jake Gibson – and backed a cadre of fintech startups, including Chipper and Albert, each at $2.5 million valuations. Today, Chipper is valued at over $1 billion, and Albert has raised over $175 million.
And while the firm has certainly cashed in on that early track record – raising a $225 million second fund last year – the duo behind it thinks it’s time to launch a nod toward their roots. Better Tomorrow Ventures tells TechCrunch that it is launching a fintech accelerator, this time under its own roof, called The Mint.
The Mint will be a three-month accelerator, based out of San Francisco, that cuts $500,000 checks in exchange for 10% equity in between six to ten startups. The initial cohort, which starts this upcoming August, already accepted one company, and sent a second acceptance letter out today.
“It’s something we’ve done successfully before. Our returns were crazy, crazy good from that initial fintech cohort, so I think if we can get anywhere near that again, our LPs will be happy,” Mohnot said.
The accelerator offers some standard support: a speaker series that includes founders from Mercury, Flexport and NerdWallet, office hours with experts, wellness resources, hiring support and desk space. Unlike some Zoom accelerator programs, The Mint is long San Francisco: two team members are moving to the city to help with logistics, and Better Tomorrow is leasing a new office space, outside of its Mission HQ, dedicated to the accelerator.
Better Tomorrow seems to be stepping in where it believes Y Combinator is lacking. “YC is built for scale. The advice is a lot like one size fits all,” Mohnot said. “We felt like with fintech, there are so many things that are unique about building that it makes sense to have something distinct.”
Among some seed stage investors, YC’s new standard deal has been met with varying degrees of weariness. Last year, YC announced that it would still offer its original deal – a $125,000 check in exchange for 7/% equity – as well as a $375,000 check at an uncapped SAFE note with a most favored nation (MFN) clause. The latter has stirred up some controversy: an MFN means that YC will get to invest $375,000 at the same terms as the investor who has the best terms in the next round. Now, YC companies are less incentivized to raise a small amount of money from angels, and more incentivized to optimize for higher valuations after Demo Day, so dilution is limited when accepting that $375,000 check.
“We think the MFN clause [that YC currently offers] can do companies a disservice. Because they end up almost having to raise at a very high valuation…you’re seeing that bite them in the ass a little bit. Because as if they don’t hit the metrics, the next round is even more challenging,” Mohnot said. While BTV’s 10% ownership is higher than other VC-spun out programs – take NextView’s $200,000 in exchange for 8% stake for an example – it’s less than what BTV usually targets for first checks, which is between 15% to 20% ownership.
Mohnot says that BTV will continue investing outside of the accelerator, but the big focus for the rest of the year in terms of net new investments will be within the program.
“I think there’s a TechCrunch article right now about fintech” pessimism, Mohnot said. “We are still really excited about the future of fintech and we liked fintech before it was cool.. At a fundamental level, financial services are 20% of GDP, and they are inherently digital, so the numbers make sense.”
The Mint, started by Better Tomorrow Ventures, wants to be the accelerator fintech needs by Natasha Mascarenhas originally published on TechCrunch
When mHub opened its doors in Chicago seven years ago, the vision was to create a traditional incubator for people making things. It would involve a prototyping lab, offices, shared workspaces, meeting rooms and classrooms. In those seven years, the accelerator says it has supported more than 500 startups, 200 manufacturers, been awarded around 450 patents, and helped to create roughly 4,000 jobs. Now, it is moving into a newly acquired, freshly refurbished space in a Chicago opportunity zone to help it incubate, accelerate and support more startups that can have a positive impact on humanity. TechCrunch spoke to mHub’s CEO and co-founder Haven Allen to find out what’s next for mHub, and what makes Chicago its perfect home.
“It’s been quite a journey over the last six years; we’ve definitely evolved beyond just the incubator,” said Allen. “Today, we have over 250 startups. But we also have manufacturers and groups like Keurig here, inventing the next Keurig machine out of our facilities. It’s both a lot of very early-stage, but some established ones that are looking for that sort of place where they can come test and build on the newest, latest equipment, connect with investors and connect with talent to scale up product sales.”
From mHub’s perspective, it had very much outgrown its current space, and its new center offers the startups and innovators and developers what they need, in the perfect geographical location.
“We wanted to be in an opportunity zone so that we could leverage that designation to attract and bring more venture capital to the table,” said Allen. “We wanted to be in one of the plant manufacturing districts and have access to public transit. And this just hits the Venn diagram perfectly right.”
The new center on Chicago’s Near Westside at 240 N. Ashland has been built-out to provide mHub with the facilities that it needs to support the development it wants to foster.
“We’ll build out more labs around energy technologies and specific testing equipment, electronics equipment and new wet labs, more battery related technologies,” said Allen. “In our current space, we don’t have really private offices beyond some of our industry partners that are embedded here. So we can support some of these growing teams as they need more space as they build their teams and inventory.”
mHub members working in the accelerator’s current electronics lab. Image Credits: mHub
In addition to the physical facilities that mHub provides, it also brings together people to help cultivate innovation and connection.
“We have 600 engineers here, which is an incredibly valuable resource for the startups in the manufacturing community,” said Allen. “So there’s a lot of contracting and collaboration that we facilitate between the startups as well as outsourcing to industry for short-term R&D projects.”
As for Chicago itself, its combination of universities, diversified manufacturing economy, existing supply chain and easy access across the country makes it geographically ideal for an incubator like mHub and the startups it wants to attract.
“We’re looking for products and founders that are trying to create things that we believe can impact humanity,” said Allen. “We really lean in on climate, energy, med devices and sustainable manufacturing, knowing that we obviously have climate issues. And there’s lots of ways that we’re going to solve it. Human behavior doesn’t appear to be the one way, so how can technology actually drive some of the advances we need?”
mHub supports startups both through its incubator and its accelerator program. The incubator program is open to anyone who is there to build a business and mHub feels it can support them. The accelerator selection process is more rigorous. It involves a selection committee of roughly 20 people drawn from investors, industry and people who have led manufacturing science at universities and national labs, and the ability to meet 19 factors. But the crucial criteria are the novelty of their ideas, their understanding of their markets, their teams and their willingness to be coached.
“We bring cohorts together around a theme partner with industry,” said Allen. “We give each of the teams $75,000 cash and $25,000 of engineering credits that they just have to use to advance their product. Then we hyper-resource them for a six-month program, and then keep them having access to the whole labs and resources for two years beyond that.”
mHub is opening its next round for climate- and energy-focused startups on May 8.
mHub opens much bigger facility to kick Chicago startups into high gear by Haje Jan Kamps originally published on TechCrunch
The growing compute power necessary to train sophisticated AI models such as OpenAI’s ChatGPT might eventually run up against a wall with mainstream chip technologies.
In a 2019 analysis, OpenAI found that from 1959 to 2012, the amount of power used to train AI models doubled every two years, and that the power usage began rising seven times faster after 2012.
It’s already causing strain. Microsoft is reportedly facing an internal shortage of the server hardware needed to run its AI, and the scarcity is driving prices up. CNBC, speaking to analysts and technologists, estimates the current cost of training a ChatGPT-like model from scratch to be over $4 million.
One solution to the AI training dilemma that’s been proposed is photonic chips, which use light to send signals rather than the electricity that conventional processors use. Photonic chips could in theory lead to higher training performance because light produces less heat than electricity, can travel faster and is far less susceptible to changes in temperature and electromagnetic fields.
Lightmatter, LightOn, Luminous Computing, Intel and NTT are among the companies developing photonic technologies. But while the technology generated much excitement a few years ago — and attracted a lot of investment — the sector has cooled noticeably since then.
There are various reasons why, but the general message from investors and analysts studying photonics is that photonic chips for AI, while promising, aren’t the panacea they were once believed to be.
Is there a future in light-powered AI chips? by Kyle Wiggers originally published on TechCrunch
In a sign that the seed-stage AI segment is still alive and kicking, Betaworks, the startup studio and VC firm, is launching a new program that’ll award around ten companies working on AI $500,000 in funding.
Scheduled to run from mid-June until mid-September, Betaworks’ program — the ninth of its kind — will provide startups access to benefits including a business-building curriculum and accelerated compute from companies including Hugging Face and Stability AI. That’s in addition to one-on-one mentorship time, events and activities plus “collaboration opportunities” with other Betaworks cohort ventures.
The program isn’t quite an accelerator; Betaworks describes it like a “camp.” Rather than writing a small check into companies across a range of categories, the firm’s looking at the “evolution” of technology and betting on a cohort that’s creating or defining a new category.
“This is the biggest change in technology in my lifetime,” Betaworks CEO John Borthwick told TechCrunch in an email interview. “We’ve been building, accelerating and investing in and around machine learning for the last decade, and in the last 12 months, everything’s changed — the launch of generative visual models like [OpenAI’s] DALL-E 2 last year, the open and affordable access to these models with the availability of stability and GPT. AI has the potential to affect every sector, and every part of how we live, work, play and even die.”
With the new “camp,” which is also being underwritten by Mozilla Ventures and Greycroft, Betaworks is specifically looking to recruit companies creating AI tools that “augment the way humans behave, create, play, work and think.” For example, Borthwick says, this could be startups thinking about UIs that focus on the context of interactions over time, or ventures exploring the infrastructure required to allow for human collaboration alongside AI tools.
“The AI stack hasn’t been fully defined yet,” Borthwick said. “Just like the early days of the internet, there will be extraordinary companies built, providing infrastructure and foundational tools, and there will also be middleware and applications that become embedded in our lives and augment pretty much everything we do.”
When asked about the legal challenges facing some AI tech, particularly generative AI, and how it might affect the startups that Betaworks intends to fund, Borthwick didn’t shy away from answering. He expects copyright, intellectual property and attribution model ownership issues will play out over the next few years and ultimately not to have an adverse impact on startups in the space — or their business models.
“Some laws and frameworks that we have today will apply and others will need to be made,” Borthwick added. “This is like the beginning of the internet where, for example, a ‘right to be forgotten’ rule hadn’t been considered yet because the technology hadn’t demanded it.”
That might be optimistic. But Betaworks hasn’t let potential legal headwinds around AI get in the way before.
The firm is funding Stability AI, which is currently embroiled in a legal battle over whether the company infringed on the rights of millions of artists by developing its text-to-image tools using web-scraped, copyrighted images. Stock image supplier Getty Images has also taken Stability AI to court for reportedly using images from its site without permission.
Suffice it to say, Betaworks has an appetite for risk — and anticipates that the reward will be worth the struggle, apparently.
Betaworks’ new ‘camp’ aims to fund transformative early-stage AI startups by Kyle Wiggers originally published on TechCrunch
Despite global headwinds, Southeast Asia’s early stage startups are still going strong, say the founders of Iterative Capital. The Singapore-based venture capital firm, which runs a YC-style accelerator program, announced today it has raised $55 million for its Fund II from LPs like Cendana, K5 Global, Village Global and Goodwater Capital.
Other backers include a group of founders and executives, such Dropbox co-founder Arash Ferdowsi, Bukalapak co-founder and former CEO Achmad Zaky, Andreessen Horowitz general partner Andrew Chen, former YC COO Qasar Younis, former Foursquare CEO David Shim and Airbnb Asia head Kum Hong Siew.
Since launching Iterative’s Fund I in 2021, the firm has backed more than 65 companies in 5 cohorts. Its portfolio companies have raised $163 million in follow-on funding and are worth $1.2 billion in total. Venture firms that have invested in Iterative’s portfolio companies include Insight Partners, Tiger Global, Monk’s Hill, Wavemaker and Hustle Fund.
The new funding will allow Iterative to increase its check sizes to $500,000 and add more programs for founders in different stages, including ones for earlier-stage founders who aren’t ready for an accelerator yet and later-stage founders who have already gained strong traction. With Fund II, Iterative’s plan is have bigger batches of startups of about 30 each. Its goal is to invest in 100-plus companies at more stages, including pre-seed, seed and Series A startups. While Iterative’s first fund did not perform follow-on investments, the firm is now in the position to do so.
Iterative co-founder and general partner Brian Ma said Fund II took just four weeks to raise, because Fund I’s founders performed well. Many of the first fund’s LPs returned and attractive return profiles in Southeast Asia also attracted new LPs.
Startups in Iterative programs have access to its 80+ group of venture partners and visiting partners, who are all previous or current operating founders.
“More concretely, we run weekly office hours, group office hours, speakers and workshops with our visiting partners, have a scaled out fundraise bootcamp program, a built out network to automate white-gloved introductions to investors and 450+ investors engage with our startups at our demo days,” said Ma.
“Some of the most important work actually happens post-cohort, where we help alumni companies deal with negotiating their A’s or B’s, deal with scaling their organizations and help coach them through cofounder issues and other growing pains.”
Some examples of Iterative’s portfolio companies that have recent raised money include Spenmo, which closed a $85 million Series B round led by Tiger Global; travel company GoZayaan, which raised $8 million and acquired FindMyAdventure to expand beyond Pakistan; and proptech startup Propseller, which raised $12 million Series A in August. Meanwhile, another Iterative alum, Sendhelper, was acquired by PropertyGuru in October.
Iterative’s founders remain upbeat about startups in Southeast Asia. Even though there are currently less startups currently exiting there, early-stage investments continue to increase. For example, a report by Google, Temasek and Bain & Co. found that Southeast Asia is “relatively less impacted by global economic trends” and that its real GDP growth is still 4.6% year-over-year. Iterative’s founders also note that Southeast Asia’s digital economy is expected to reach $200 billion this year, while Indonesia’s online spending it expected to hit $130 billion by 2025. Vietnam is an especially promising market, forecasted to more than double its online GMV over the next three years.
Ma said Southeast Asian startups benefit from high potential and reasonable valuations. “With depressed economies and lofty priced companies in the U.S., China, etc., more capital is flowing into more nascent and higher growth regions like Southeast Asia. We believe this is where the best returns will come from in the next 7 to 10 years.”
Iterative launches its second fund for Southeast Asia startups by Catherine Shu originally published on TechCrunch
New crypto startups forged ahead during Alliance DAO’s demo day on Wednesday amid the FTX implosion.
“This is actually worse than the 2018 bear market,” Qiao Wang, a core contributor at Alliance DAO, said, referring to the tentative plans for Binance to absorb competitor FTX. “Today, everyone was caught off guard, myself included … the last three months of working closely with our founders in All9, I’m hopeful again. It’s people like them that will push our industry forward.”
The most recent cohort, known as All9, for Alliance DAO, a web3 accelerator and builder community, presented their ideas on Wednesday during a demo day, exclusively covered by TechCrunch. It seems like it was just yesterday that we covered Alliance DAO’s previous demo day, but four months have passed.
Twice a year, Alliance DAO brings in web3 founders for a three-month program. To date, Alliance DAO alumni have created over $10 billion in market capitalization, Wang said. There were about 953 applications for this cohort, but only 17 teams were chosen and graduated from the program.
Many of the teams are looking at improving crypto themes like proof-of-physical-work, wallet experience for everyday users, product-driven protocols, crypto B2B products, on-chain data and verticalization, Wang said. “The cohort is a fairly representative sample of what’s happening in the industry at large.”
The cohort focused on a range of subsectors and products across web3 like authentication, liquid staking, crypto wallets and decentralized machine learning, among others. About 38% of the startups focused on the Ethereum ecosystem, while Polygon made up 21% and Solana 17%.
Mentors include Colleen Sullivan, co-head of ventures at Brevan Howard Digital; Mike Dudas, founder of LinksDAO, The Block and an investor for 6th Man Ventures; Anatoly Yakovenko, co-founder of Solana; Ryan Selkis, founder and CEO of Messari; Mounir Benchemled, founder of ParaSwap; Amir Bandeali, co-CEO of 0x Labs; and Ryan Wyatt, CEO of Polygon Studios.
Here’s a breakdown of the 17 startups:
Company name: Ora
Company name: Mensari
Company name: Tensor
Company name: Raleon
Company name: Spexigon
Company name: SlashAuth
Company name: Stride
Company name: Ethos
Company name: Chain ML
Company name: Legends of Venari
Company name: Sort
Company name: Persona
Company name: Ostium
Company name: Slise
Company name: Space and Time
Company name: 0xPass
Company name: Niural
Say hello to the newest crypto startups from web3 accelerator Alliance DAO’s demo day by Jacquelyn Melinek originally published on TechCrunch
Station F, the iconic startup campus in Paris, is revamping its Founders Program completely to turn it into an acceleration program. Founders who decide to join the accelerator will get many different benefits. They’ll also have to hand out a 1% equity stake to Station F.
“We are changing the flagship program of Station F. Everything is changing but the name,” Station F director Roxanne Varza told me.
With the Founders Program, Station F is looking for entrepreneurs who are just getting started. Even if these teams haven’t necessarily found a product-market fit, they can apply to join the program.
Of course, the first thing these startups get when they join the Founders Program is some office space at Station F. They will then start with an intensive 6-week program with workshops and classes. For instance, they’ll learn about building a startup team and product-market fit.
After that, startups get another six weeks to iterate and execute. They pitch in front of everyone after this initial phase. Startups then stay at Station F for another 12 months. They pitch their startup once again at the end of the program.
The new Founders Program lasts 15 months in total, which is much longer than the original Founders Program. “With short programs, startups want to stay and we spend too much time on changes and logistics,” Varza said.
In order to remain focused on these startups, Station F is actually shrinking the size of the Founders Program. Station F could accept up to 200 startups with its old Founders Program. It now aims to accept 25 startups in the Founders Program with two batches per year.
Station F tries to match each startup with an advisor that will be very hands-on. For instance, some advisors include the founders of Alan, Swile and The Sandbox. Station F recommends that startups incentivize the advisor by adding them to the cap table. It can vary depending on the advisor but Station F recommends at least 0.2% in equity.
The startup campus is already running a first batch with 21 different companies. These companies are focused on four verticals — web3, fintech, impact and creator economy. Verticals will change in future batches.
And, yes, Station F is taking equity in those startups for the first time. “At first, we want to remain founder friendly. Some people told us it’s not a lot, others say that it’s a lot,” Varza said.
“But Station F is not here to take 50% in equity. We just want to prove that we have skin in the game and that we will remain engaged,” she added.
Station F relies a lot on personal recommendations from other people in the tech ecosystem. The internal team then screens the applications to pick some startups. Applications for the next batch will start near the end of November.
There are also other programs on the campus as well as partnerships with other companies so that they can run their own program at Station F. All the other programs remain unchanged.
Station F turns its main startup program into an acceleration program by Romain Dillet originally published on TechCrunch