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Watch the TechCrunch Live Minneapolis Pitch-Off right here

Yesterday, Wednesday, September 7, TechCrunch Live hosted a special, extended event focusing on Minneapolis, Minnesota. The area is quickly becoming a major hotbed of startups in the Midwest, and the event featured some of the best founders and investors from the region. Following the panels and interviews, three Minneapolis startups competed for free tickets to TechCrunch Disrupt.

Startups

  • Axon Athletics, a mental health platform for student athletes
  • Kyros Care, a digital platform for substance recovery services.
  • NXgenPort, an implantable chemo port that features added sensors and remote connectivity functions.

Judges

After deliberating and measuring the startups’ potential for social or monetary impact, the two judges picked NXgenPort as the winner. The judges were impressed by NXgenPort’s CEO and co-founder Cathy Skinner, saying, in part, her pitch was well polished and made it easy to understand the complex nature of the company’s device and business model.

You can watch the pitch-off right here!

Watch the TechCrunch Live Minneapolis Pitch-Off right here by Matt Burns originally published on TechCrunch

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UK’s FocalPoint raises $17M for its software-based approach to repairing the flaws of GPS

GPS in its many regional flavors has become a ubiquitous feature in phones, smart watches, cars and other connected devices, but for all the location-based features that it helps enable (mapping being the most obvious) it has a lot of shortcomings: it can be slow and inaccurate, it can contribute to faster battery drain, and as people are discovering, it can be manipulated or exploited in unintended and alarming ways.

Today, a UK startup called FocalPoint that’s building software to improve GPS’s operations, accuracy and security is announcing a round of funding to continue building out its tech — which today works up to 4G and will in future also work with 5G and WiFi — and to roll out the first commercial deployments of its system with early customers. Use cases for the tech include more accurate location for smartphone apps for navigation or location tracking (for example for running and other sports); to help companies with their navigation services (for example for transportation or fleet management); and for better GPS security overall.

Based in Cambridge and founded as a spinout from Cambridge University, FocalPoint has raised £15 million ($17 million), part of a Series C round that it expects to total £23 million ($26 million) when fully completed. Molten Ventures (FKA Draper Esprit) — which led a £6 million Series B in 2021– and Gresham House are the two investors in so far. Ramsey Faragher, the CTO and founder, said that the other investors, which include a major U.S. automotive brand that is a strategic investor, will be closing in the coming weeks.

FocalPoint about a year ago had another notable business development that is helping put the startup on potential customers’ radar: last September, it appointed Scott Pomerantz as its CEO. Described as a “living legend in GPS” Pomerantz previously founded Global Locate, one of the first companies to bring GPS to the mass market, with its tech used by Apple and others. That startup eventually got acquired by Broadcom.

Speaking of Apple, FocalPoint’s focus on better GPS is coming at a timely moment. Just yesterday, the iPhone giant announced its newest Apple Watch models, featuring much more accurate GPS using a multi band approach on devices touting newly extended battery life. It is a signal of the priority that device makers are putting on improving GPS, and investments that they would be willing to make to do so, and thus the opportunity for startups offering new and more effective approaches to crack the market.

As Faragher explained to TC, GPS development to date has largely been based around chipsets embedded in the devices using it, which has meant that improving services by and large have depended on new versions of that hardware. That’s a big hill to climb, however, when considering the embedded market of legacy chips and the process of rolling out next-generation hardware: There were 1.8 billion GPS chipsets shipped as of 2019, with the total projected to grow to 2.8 billion by 2029. Smartphones account for the bulk of those numbers, but autonomy, road and drone devices are growing the fastest.

Along with that, GPS relies on using one or another of two radio bands; typically one produces better positioning than the other but it does so at a cost of draining battery life in the process.

FocalPoint is working on a software-based solution, Faragher said, which he said means that the chipsets themselves do not necessarily need to be swapped out or upgraded to implement its faster approach.

It’s working on algorithms, he said, which are aimed at understanding the directions of satellite signals, using this to gain better understanding of exact location of a device — a process that not only improves the accuracy of a location, but helps to identify when a signal is potentially getting spoofed to appear in one place when it’s actually somewhere else. This is carried out using the band that is less battery-intensive, which previously had been deemed to have poorer positioning performance. “The higher performing signal has always been more computationally intensive,” he said, which is why it impacts batter life. “We can make the lower quality, lower-battery-intensive signal better.”

There are other approaches aiming for the same outcome, but Faragher said they have been too costly and clunky.

“Only military antennas have been able to detect movement like this before,” he said, with those antennas coming in the form, of satellite dishes that are the size of a dinner plate and cost around $10,000 each — a big expense when hundreds need to be used across a wider mobile network. “What we are offering is a military-grade feature for the cost of software upgrade,” he said. “We synthesize expensive antennae.” this could help reduce the cost of other components and this resonates. End expense off a component
There are two different frequencies used by satellites, more computationally intensive for the higher performing signal. So we can make the lower quality battery use signal better than then more expensive signal.

Companies that have worked with FocalPoint to test how its software works are a key to where the company is aiming its business: the startup partnered with Google and its Android team to test how its software could improve location of users for its mapping software in a trial that the two companies ran in London.

“We demonstrated to Google that before using our technology, it couldn’t use the lower quality GPS band for its in-house mapping technology,” he said. That in-house tech is what Google would use for any navigation service, including for Google Maps as well as its devices. He said that Google’s approach, which looks at how signals bounce off buildings to figure out location, is useful with the higher GPS signal but not the lower one, therefore being a stronger drain on battery life. “We could make that lower band work.”

Faragher would not comment on whether it was working with Google, or any other specific companies, during the interview.

“Existing GPS technologies are no longer fit for purpose and we’re proud to continue our support for FocalPoint in its mission to revolutionise the accuracy of GPS and other global navigation satellite systems and in doing so, solve the issues faced by business and consumers with imprecise and unsafe receivers,” said David Cummings, a venture partner with Molten Ventures, in a statement. “We’ve been impressed with how the team has continued to build and expand since its Series B funding round last year, and are thrilled to support FocalPoint in this next exciting chapter for the company”.

UK’s FocalPoint raises $17M for its software-based approach to repairing the flaws of GPS by Ingrid Lunden originally published on TechCrunch

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Polychain puts its money on HotStreak to streamline sports betting using blockchain

In the world of sports betting, instant payments and reliable custody are key to the user experience. HotStreak, a web3 platform for daily fantasy sports (DFS) contests, is wagering that the decentralized nature of the blockchain makes it an ideal solution for DFS platforms.

The sports betting market in the US has grown rapidly as states begin loosening regulations around the industry. It doubled in size in 2021 with over $52.7 billion total wagered over the year, according to Morning Consult.

There are two major issues with large sports betting platforms like FanDuel today, HotStreak CEO Greg Dean told TechCrunch in an interview. The first is that as a player, “getting your money in and out is extraordinarily painful,” he said, because payouts are tethered to legacy payment systems such as ACH transfer that require the user to trust the counterparty against whom they are betting on the platform to actually distribute funds to them.

While users experience the friction of slow-moving, centralized payment systems, operators bear the brunt of building and maintaining their own proprietary currencies on-platform to facilitate payouts, Dean said.

The team behind HotStreak's web3 sports betting protocol

The team behind HotStreak’s web3 sports betting protocol Image Credits: HotStreak

“When you talk to somebody and you explain that [for] billion-dollar companies like FanDuel, when you open up their tech stack and you look inside, you see an on-ramp, proprietary wallet, a proprietary digital currency and a proprietary ledger, all kind of maintained by this centralized, trusted authority. I think we’re going to look back at that and kind of laugh at the industry a little bit,” Dean said.

From the operators’ perspective, he added, creating these payment systems creates overhead.

“It’s just a huge inefficiency in terms of operating the business. Really, what they want to do is build good products that users want to use, not become an on and off-ramp for fiat, or for a proprietary digital currency,” he added.

HotStreak’s decentralized SHARP protocol aims to tackle both sides of the issue from a payments and custody perspective by facilitating near-instant payments and handling custody of assets based on a set of rules pre-determined within the protocol itself rather than relying on counterparties to initiate payments to other players. The settlement period for payments on its platform is 10 seconds, according to the company’s website.

HotStreak raised ~$1.5 million for its seed round in May last year largely from angel investors who Dean said are “huge crypto enthusiasts.” Today, the company announced it has brought in an additional $9 million in funding for a Series A round led by crypto-native VC firm Polychain Capital, a new investor in HotStreak.

The product has evolved significantly since the seed round, Dean said. HotStreak’s 10-person team plans to use the new funding to further develop its own platform as well as the underlying protocol on which it runs, he continued.

“When we raised our first round, it was more just based on the technology that we’re building for the DFS product, which is basically a bunch of neural networks that price the short durations of sporting events,” Dean said.

The company has seen $3 to $5 million worth of transactions per month on its platform this summer and is profitable today, Dean said, though he did not share specific numbers regarding revenue or profitability.

FanDuel co-founder and CEO Nigel Eccles, who invests in an advises numerous sports betting businesses, is joining as chairman of the startup’s board as part of the Series A, which could help the company stay connected to opportunities to work with other companies in the space.

HotStreak itself makes money both from the entry fees it charges players to use its platform, which it says are listed on the app at the start of each game, and plans to monetize its software by selling it to other sports betting platforms, according to Dean.

Dean and his team aren’t the only founders who have recognized room for blockchain-based innovation in the sports betting space. Last month, BetDEX, a startup co-founded by ex-FanDuel execs including Eccles, debuted its own Solana-based sports betting protocol, armed with $21 million in funding it raised last year from Paradigm and FTX. BetDEX is more focused on bringing down fees in the space, while HotStreak is focusing its efforts on improving payments and custody processes.

“There’s an opportunity here to build something that can really change the industry and change the way people interact with sports gaming in general, because it really just doesn’t make sense that you’d go give your money to some centralized person to hold on to just in case you wanted to make a bad or enter a DFS contest,” Dean said.

While Dean admitted that the overall market for DFS providers could shrink as more U.S. states bring legalized sports betting online, he believes the overall sports gaming market is still set to grow significantly. Focusing on DFS to start gives HotStreak a regulatory advantage, he explained, although the platform will likely expand into offering more traditional sports betting products, which typically require more expensive legal disclosures.

HotStreak doesn’t spend much on marketing, an activity Dean described as “incinerating” cash. Instead, the company is focused on relentlessly iterating its user experience.

“If you’ve been in crypto long enough, it kind of feels like a lot of solutions looking for a problem. This is perhaps like one of the more concrete examples of a real existing systemic problem in an industry, where a web3 protocol could change that and drastically improve things,” Dean said.

Draftea kicks off LatAm fantasy football with NFL partnership, fresh funding

Polychain puts its money on HotStreak to streamline sports betting using blockchain by Anita Ramaswamy originally published on TechCrunch

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With schools increasingly focused on mental health, PsycApps raises Seed round for US expansion

I’ve been tracking PsycApps, a startup that came up with a gamified mental health game ‘eQuoo’, since 2016, and this company – and its founder – is nothing if not persistent in ‘pivoting into the wind’. The last we heard it had been approved by the UK’s National Heath Service and was even distributed by Unilever. And, of course, the after-effects of the COVID-19 pandemic has only created a greater need for startups addressing mental health.

But now it is winning approval from the investment community in the shape of a $1.7 seed capital raise from US-based Morningside Ventures.

Describing itself as an ‘evidence-based gamified mental health game for teens and young adults’, eQuoo is now aiming its platform at the 50% of teens and tweens who self-report struggling with one or more issues of mental health.

PsycApp’s platform offers a mental health intervention game aimed at higher education institutions, many of which are now legally obliged to take care of students’ mental health. And because eQuoo has gone through clinical trials, it’s securing contracts with schools that need that validation in order to offer it to students. In theory, this means that any other platform trying to do the same thing will meet a barrier to entry into this market.

In a statement, Stephen Bruso of Morningside Ventures commented that low engagement in mental health apps is a problem, but he thinks eQuoo has cracked the model: “Digital health interventions will be critical in the way that our society addresses the second, ongoing pandemic of mental health issues. However, designing these interventions to maximize long-term engagement and outcomes will be critical to making a difference. Silja and her team have shown robust engagement and outcomes data in large clinical studies.”

Clinical Psychologist and Founder Silja Litvin – together with Co-Founder Vanessa Hirsch-Angus – points out that 70% of 16 to 28-year-olds are casual gamers, hence why she eQuoo has had staying power amongst young adults used to the gaming mechanic.

eQuoo’s EdTech appeal – it says – is that secondary schools, colleges, and universities are legally required to keep their students healthy, and that increasingly means mental – as well as physical – health as well. In the UK, Ofsted, the UK’s education regulator and schools and colleges assessor, has made it a requirement for schools and colleges to include a ‘resilience and personal growth program’ within their curriculum before they can achieve a top rating.

eQuoo claims it is the only tool covered by Ofsted that has clinical trials ‘proving positive impact on student’s resilience, anxiety, and depression,’ it says.

Regional College and Paragon Skills are two of eQuoo’s newest clients, covering nearly 20,000 students and apprentices in the UK.

Speaking to me over a call, Litvin said the startup had gained traction after switching from a short-term game to a long-term one, a move which tipped the balance for Morningside’s investment.

“We’ve done a complete reboot of the game, adding multiple stories, an in app arcade, and an in-app chat bot that gives you feedback on your well-being. We went from five weeks to 52 weeks. We have an in-app arcade with many games and many exercises that are all mental health related,” she told me.

“With this funding, we’ll make sure that it never ends. You could potentially use the game for the rest of your life if you wanted to, which is not an issue because it’s also in the domain of personal growth. So it’s not just about addressing mental health.”

I put it to her that selling into the education market is notoriously difficult, especially for startups.

She countered: “Ofsted just published an update that said if a school wants a full rating, it needs to have a resilience and personal development product program in place. We are the only evidence-based, indefinitely scalable product made specifically for that youth age bracket, that has clinical trials to prove its efficiency in resilience and personal development… Schools are scrambling to find a programme and most of the programmes aren’t evidence based and aren’t scalable, as eQuoo is.”

She added that Moningside has lines into “all the major universities in the US” which will help it to scale in North Amervia.

Litvin also added that the company had had to “run on fumes” for a while before securing the Seed round: “We scaled down. We didn’t pay ourselves for quite a few months. With this money, we can go into growth mode.”

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Reddit acquires contextualization company Spiketrap to boost its ads business

Reddit’s acquisition spree is continuing this morning with news that the company is bringing the audience contextualization company Spiketrap’s technology in-house. Deal terms were not disclosed, but Reddit says Spiketrap’s AI-powered contextual analysis and tools will help Reddit to improve in areas like ad quality scoring and will boost prediction models for powering auto-bidding.

The deal signals Reddit’s growing investment in its advertising business as it aims to make it easier for advertisers to target relevant audiences based on interests. This deal also arrives at a time when Apple’s consumer privacy tools, App Tracking Transparency or ATT, have been impacting the effectiveness of online ads across major tech platforms, like Facebook and Snap, as consumers opt out of ads personalization.

Founded in 2016 by Kieran Seán Fitzpatrick, Virgilio Pigliucci, and Andrea Vattani, San Francisco-based Spiketrap counts over 20 employees, according to its website. The company touts its proprietary Clair AI technology, which is able to extract the “signal from the noise” of unstructured datasets. Combined with its knowledge graph, the company offers a range of solutions in contextual ad targeting, impact measurement, brand safety monitoring, and other research and data-as-a-service solutions, it says.

In particular, it promotes technology that can do things like figure out the entities a piece of content may be referring to, even if they’re not explicitly mentioned in areas like movies, TV shows, games, franchises, and more. This AI is able to deal with ambiguities, abbreviations, and acronyms, the company notes. Meanwhile, its Emotion AI is also able to detect the sentiment around a post, like excitement, sarcasm, or toxicity — the latter an area Reddit has struggled with over the years, often having to shut down hateful and deplorable subreddits, those that engage in harassment, and others that advertisers would want to avoid. Most recently, it banned the r/donaldtrump subreddit after the January 6 riots.

“The richness of conversation within our 100,000+ active communities is what makes Reddit so unique and so valuable for advertisers. We believe targeting relevant audiences based on interests and with the context of the conversations they are engaging in helps ensure advertisers are reaching the right people in the most efficient ways,” said Reddit EVP of Ads Monetization, Shariq Rizvi, in a statement about the deal. “We have been actively investing in solutions to this end for some time and this acquisition will round out Reddit’s capability, taking it to the next level. I am thrilled to welcome the Spiketrap team to the Reddit family,” Rizvi added.

Today’s announcement follows other recent acquisitions by Reddit, including Spell, a platform for running machine learning experiments, in June, and natural language processing company MeaningCloud in July. With the former, Reddit could use the ML technology to improve its capabilities across a range of areas — like the recommendations for its newer Discover tab, plus its safety work and targeted ads business. MeaningCloud, similar to Spiketrap, also promoted its ability to extract meaning from unstructured content, suggesting Reddit has broader aims at making rapid improvements in this area, particularly with regard to its ability to serve advertisers.

Reddit says the Spiketrap team has already joined the company and will spearhead a number of projects across its ads business going forward.

“Our goal has always been to contextualize language at scale and in realtime to help creators, brands, and platforms genuinely understand and meaningfully engage their audiences,” said Kieran Fitzpatrick, CEO and co-founder of Spiketrap, in an announcement. “We’re looking forward to scaling these efforts even further as part of Reddit.”

 

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Announcing the agenda for TechCrunch Live’s special Minneapolis event!

Minneapolis is quickly solidifying itself as one of the Midwest’s most important startup ecosystem. TechCrunch Live is thrilled to host a special (virtual) event in the Twin Cities. Next week, on Wednesday, September 7, our crew is set to interview some of the best startups and investors, and speak on the area’s recent fundings, best practices, and strategies. Just like every TechCrunch Live event, this one is free to attend and participate.

To help highlight what the city has to offer, we’re enlisting the help of local startups! Like past City Spotlights, this one will feature a pitch-off with local Minneapolis startups pitching to VCs. The winner gets fast-tracked into Startup Battlefield 200, which includes free exhibition space at TechCrunch Disrupt 2022. Applications are closed, but everyone can register for the event here.

Check out this agenda:

TechCrunch Live in Minneapolis, Minnesota

1:00pm CT: Raising capital outside of the coasts with Anna Mason (Rise of the Rest Seed Fund) + Andrew Leone (Dispatch)

Andrew Leone’s Dispatch provides businesses with an on-demand courier delivery service. Headquartered in the greater Minneapolis, Minnesota area, the startup is quickly becoming a shining star in the area’s exploding startup ecosystem. It’s the type of startup that captures the attention of local investors, but outsiders as well including Anna Mason, managing partner at Revolution’s Rise of the Rest fund.

1:30pm CT: Who’s writing checks in MSP with Mary Grove (Bread & Butter Fund) and Justin Kaufenberg (Rally Ventures)

A panel on the growth opportunities for Minnesota from the perspective of VC funds – what’s needed in the market, what are they funding right, where startups should look for funding.

2:00pm CT: Building a fintech company with Atif Siddiqi (Branch) and Ryan Broshar (Matchstick Ventures)

Minneapolis has a growing number of fintech companies, and Branch is among the best positioned. Hear from its CEO and founder Atif Siddiqi and one of the company’s early investors, Ryan Broshar, managing director and partner at Matchstick Ventures.

2:20pm CT: Pitch-off

Judges: Mahati Sridhar and Sarah Hinkfuss
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How to fundraise a Series A

Jenny Lefcourt Contributor
Jenny is an entrepreneur, operator, board member, advisor, and investor in tech for over 25 years.

Editor’s note: Jenny Lefcourt is a TechCrunch Live guest on August 31, 2022 where, along with Guillaume de Zwirek, CEO and co-founder of WELL Health, she’s scheduled to speak on the specific steps founders should follow when raising a Series A. The event records live and is available to watch at 12:00pm PDT. It’s free to attend. Register here. Replays will be available and posted here following the event.

Beginning with the first company I co-founded 25 years ago and continuing through the second company I co-founded 15 years ago, I raised over $100M from top-tier VCs. During that time, less capital was floating around, and those numbers were considered enormous. The bad news is that I over-capitalized my companies, but the good news is that the process taught me how VCs think and the best way to pitch them. Since 2014, I’ve been a seed-stage investor at Freestyle and had the opportunity to fine-tune this skill by working closely with founders in our portfolio on raising Series A rounds. The market is demanding right now – founders, I hope the following guide helps many of you fundraise in this challenging environment.

The key when raising is to understand what VCs are looking for in a founder and a business at each stage, and then you can make the call on the best way to pitch them in a way that feels right to you.

There’s a notable difference between raising Seed and Series A rounds: A Seed is often raised solely on a founder’s big vision, whereas a Series A typically needs a big vision and business traction, especially in the current market. Below are general best practices for pitching, followed by specific advice on structuring a Series A story arc.

Fundraising wisdom for any stage

  • Mindset matters! Enter a meeting with the spirit of having an intellectual conversation about your business v being in hard-core “sell” mode. VCs prefer to work with founders who can discuss their business thoughtfully. Be curious, confident, and ready to debate–and, at all costs, resist being defensive. I discuss mindset more here, Learn to Love Fundraising.
  • Trust is table stakes. If you don’t know the answer to a question, saying so gains respect and trust, while avoiding the question destroys it. One of the easiest ways to lose an investor’s interest in a first meeting is for the VC to feel like you aren’t being direct. There’s no expectation of you knowing all the answers–there is an expectation of telling it straight.
  • VCs have short attention spans! You need to get them interested in the first 5-10 minutes of the meeting to earn their attention for the rest. See more below on “Section 1.”
  • Goal of meeting #1 is to get meeting #2. Your goal is not to tell them everything or pre-emptively answer any question they may ask. So keep your story high level and interesting – do not data dump or mire them in the details too early.
  • Tell a good story vs. “present slides”. This is why I recommend that founders spend time crafting their story arc, followed by creating the slides to support that story.
    Make your main points very clear and support those points with the data or color that helps them believe. Don’t make VCs listen to a lot of talk and inundate them with a lot of data in hopes that they connect the dots. Subtle does not win here.
  • Prepare for questions. Have a hearty appendix that covers any question you may get or does a deeper dive into the business. VCs love it when they ask a question and the founder pulls up a slide that directly addresses it. The VCs get the information they are looking for, and you show them that you are just the kind of thoughtful founder with whom they like to work!
    Manage time. Know how much time you have and make sure to make your main key points. Don’t let it get to minute 30, and you’re still down a rabbit hole on a non-critical part of the business.

Series A Fundraising wisdom

When your first Series A pitch is over, ideally, the VC is excited about the opportunity, impressed with you, knows enough to believe you are on a promising path, and is still thinking about you and your business well after the meeting. Typically founders have 30 minutes (often over Zoom) to make this happen.

I recommend thinking about your pitch in three “Sections.”

SECTION 1: The goal is to earn the right to their attention for the rest of the meeting! It may include some/all of the following:

  • Team
  • Vision. The big vision of the company–NOT simply what you do today.
  • Market. Educate VCs about your market, which includes market size and macro trends. VCs should understand that it is a big market and understand a reason for the “why now?” question.
  • Problem/Opportunity. Make it clear who your customer is and what their problem is that you are solving. Sometimes it is less of a “problem” you are solving and more of a new opportunity that now exists, given the changes in the market.
  • Solution for stated problem/opportunity (precisely what your company does!)
  • Early sign of success. Have a visual here where you can imagine the title of this slide being “And it is Working!” This may be a graph of a key metric like revenue or users that goes up and to the right, lots of logos of companies that have already signed up, or other goodness. The goal here is to get them leaning in and excited to learn more.

After pitching this section, take a breath and check in with the investors. Ask: “Any questions? Does this sense?”

SECTION 2: The goal here is to educate them on how you have de-risked the business thus far and presented traction on product and growth. This section typically contains some or all of the following:

  • Where you have started. Note: all startups have to start somewhere. You told them earlier what the big vision is. Now you want to tell them where you started (and maybe why) and how it is going. Just be careful not to get bogged down in too much detail.
  • Your customers. Who they are and what your value proposition is for them.
  • Go to Market. Explain how you target/acquire customers.
  • Traction thus far. You want to be clear about the main levers/metrics that drive your business and share information on how those have evolved. You do not need to cover all metrics and details–you can cover that in the Appendix. Here is a laundry list of potential traction metrics: new customers/total customers, retention/churn, engagement, sales funnel conversion, sales pipeline, average sales price, revenue, gross margins, CAC payback, LTV:CAC ratio,…
  • Unit Economics
  • Product Love. Ideally, you share engagement stats or something that shows that people are not just buying/using your product but are loving it and finding it indispensable. Possibilities here include engagement stats, virality, spending more time or money with your business over time, putting more of their business on your platform, etc. A few testimonials alongside the data can also help.
  • Any other slide that is CRITICAL to your company’s success.
  • Competitive landscape. This is NOT a feature comparison but rather a market mapping to educate them on the players. Many use a 2×2 map to show who is in the market based on two attributes where your company sits alone in the top right quadrant. This may feel counter-intuitive, but you want big, important players on this map as you want your prize to be worth winning. Example from Scenery:

A screenshot from Scenery’s pitch deck

SECTION 3: The goal here is to tell a straightforward story of where you are headed from here and how the business becomes massive. This section typically contains some or all of the following:

  • Product and/or strategic/geo rollout roadmap. Cover your plans and explain why you believe this is the best path forward
  • 3-year financial projections (maybe here, maybe Appendix)
  • Milestones you will hit with this round. Note: most VCs care less about how you will “spend” the capital than what you will achieve with the capital (note: use of proceeds can be a good Appendix slide.). VCs want your business to be more valuable by the time you raise your next round. Potential milestones could include revenue, number of users, product/technology developed, number of markets you will be in, and key partnerships,…

APPENDIX: The goal here is to address any question you may get asked or dive deeper into an aspect of your business. As you get more questions, add more appendix slides! I recommend pulling a specific slide up when asked for more information on a subject. Some potential appendix slides include:

  • Sales productivity
  • Sales pipeline
  • Deeper dive into current customers
  • Acquisition and payback period by channel
  • Deeper breakdown of market
  • Cohort analysis
  • Net Promoter Score (NPS) or Sean Ellis test
  • Product Roadmap
  • Geography rollout plans
  • Organization structure and team + key hires

Unquestionably, fundraising can be daunting and exhausting. However, I would encourage you to recognize some positive aspects of fundraising…the clarity you gain about your business as you prepare to pitch, the wisdom you will get from many of your meetings and something not discussed as much, the customers you can acquire when interested VCs introduce you to their portfolio companies. Lastly, remember, you only need one VC to say yes!

A couple of additional resources:

If you’ve yet to raise your Seed round, you may find this interesting to watch (especially for women founders). Jess Lee @ Sequoia and I dissected a VC pitch for Seed for All Raise’s first Female Founder Office Hours.

Top-tier pitch agency, 4th & King, and I did a session on Series A Fundraising with Freestyle portfolio founders, which you can watch here.

 

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UK mobile and broadband carriers face fines of $117K/day, or 10% of sales, if they fail to follow new cybersecurity rules

More than three years in the making, the UK government today announced a new, sweeping set of rules it will be imposing on broadband and mobile carriers to tighten up their network security against cyber attacks — aimed at being “among the strongest in the world” when they are rolled out, said the Department for Digital, Culture, Media and Sport.

The new requirements cover areas such as how (and from whom) providers can procure infrastructure and services; how providers police activity and access; the investments they make into their security and data protection and the monitoring of that; how providers inform stakeholders of resulting data breaches or network outages; and more. The rules will start to get introduced in October, with carriers expected to fully implement new procedures by March 2024.

Critically, those who fail to comply with the new regulations will face big fines: non-compliance can result in up to 10% of annual revenues; continuing contraventions will see fines of £100,000 ($117,000) per day. Communications regulator Ofcom, which worked with the National Cyber Security Centre to formulate the new regulations and code of practice, will enforce compliance and fines.

The rules are the first big enforcement directives to come out of the Telecommunications (Security) Act, which was voted into law in November 2021. 

“We know how damaging cyber attacks on critical infrastructure can be, and our broadband and mobile networks are central to our way of life,” Digital Infrastructure Minister Matt Warman said in a statement. “We are ramping up protections for these vital networks by introducing one of the world’s toughest telecoms security regimes which secure our communications against current and future threats.”

The emergence of the new security laws and enforcement process comes at a crossroads.

On one hand, as security breaches continue to grow in scope and frequency, one of the most significant battlegrounds that has emerged in the fight against cybercrime has been  network infrastructure — the mobile and broadband rails that all of our apps and device need to function. For the most part broadband and mobile providers have set their own standards and processes, although the government today pointed out that a Telecoms Supply Chain Review that it carried out “found providers often have little incentive to adopt the best security practices.”

On the other, there have been a number of breaches over the years that point not just to the sitting duck that is network infrastructure, but the failure to protect it. These have included incidents that threaten to reveal carriers’ source code; exposure of lax security policies to gain network access; and creating targets out of their customers by not being stronger on security. The state of play was particularly laid bare a few years ago as 5G networks were starting to take shape, when there were question marks over not just how those networks would be secured, but whether the very equipment that was being procured — Chinese vendors being a key issue at the time that the legislation was first taking shape — was safe.

The aim of the new rules is meant to be all-encompassing, covering not just how networks are being built and run, but the services that run on them.

As the government lays out, they “protect data processed by their networks and services, and secure the critical functions which allow them to be operated and managed; protect software and equipment which monitor and analyze their networks and services; [require providers to] have a deep understanding of their security risks and the ability to identify when anomalous activity is taking place with regular reporting to internal boards; and take account of supply chain risks, and understand and control who has the ability to access and make changes to the operation of their networks and services to enhance security.”

Notably the new laws do not lay out any specific names of companies, nor of countries, which gives the government license to change course, but might be seen as a way to further politicize the process.

“We increasingly rely on our telecoms networks for our daily lives, our economy and the essential services we all use,” said NCSC Technical Director Dr Ian Levy in a statement. “These new regulations will ensure that the security and resilience of those networks, and the equipment that underpins them, is appropriate for the future.”

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Moderna sues Pfizer, BioNTech over alleged mRNA patent infringement

Moderna filed a lawsuit against Pfizer and BioNTech claiming the biopharmaceutical companies infringed on Moderna’s patents related to mRNA technology in develop of their COVID-19 vaccine.

The lawsuit, to be filed in the U.S. District Court in Massachusetts and Regional Court of Düsseldorf in Germany, alleges Pfizer-BioNTech’s vaccine Comirnaty infringes on Moderna’s patent filed between 2010 and 2016.

“We believe that Pfizer and BioNTech unlawfully copied Moderna’s inventions, and they have continued to use them without permission,” said Moderna chief legal officer Shannon Thyme Klinger in the company’s press release.

A Pfizer spokesperson told TechCrunch they are stunned by the allegations because “the Pfizer/BioNTech COVID-19 vaccine was based on BioNTech’s proprietary mRNA technology and developed by both BioNTech and Pfizer.”

BioNTech in their statement said they plan on “vigorously [defending] against all allegations of patent infringement.

“BioNTech also values and respects valid and enforceable intellectual property rights of others and remains confident in its intellectual property,” read the company’s statement. “It is an unfortunate but rather regular occurrence that other companies make allegations that a successful product potentially infringes their intellectual property rights, even more so here after witnessing the historic accomplishments of a vaccine like COMIRNATY®.”

Moderna is accusing the companies of copying two features they claim are “critical to the success of the mRNA vaccines.” One of the features includes a chemical modification to help avoid undesirable immune responses to mRNA, and the other is related to the encoding of the spike protein in a lipid molecule.

The company is currently seeking monetary damages, but isn’t looking for an injunction to force Pfizer and BioNTech’s vaccine off the market.

“This foundational platform, which we began building in 2010, along with our patented work on coronaviruses in 2015 and 2016, enabled us to produce a safe and highly effective COVID-19 vaccine in record time after the pandemic struck,” said Moderna Chief Executive Officer Stéphane Bancel in the release. “As we work to combat health challenges moving forward, Moderna is using our mRNA technology platform to develop medicines that could treat and prevent infectious diseases like influenza and HIV, as well as autoimmune and cardiovascular diseases and rare forms of cancer.”

Moderna announced they began development on mRNA vaccines targeting the seasonal flu HIV and Nipah virus back in 2021.

According to the Centers for Disease Control and Prevention, over 360 million doses of Pfizer-BioNTech’s COVID-19 vaccine have been administered in the country. Moderna has had close to 230 million doses administered.

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$10B crypto developer platform Alchemy buys coding bootcamp in first-ever acquisition

Web3 developer infrastructure startup Alchemy, which last raised a $200 million Series C1 last February, has just made its first acquisition ever — and it’s in the education space. The company purchased education startup ChainShot, which runs coding bootcamps for aspiring web3 developers, Alchemy cofounder and CEO Nikil Viswanathan told TechCrunch exclusively. Alchemy did not disclose the terms of the deal.

For Alchemy, the acquisition seems like a fit considering the company’s goal is to be the starting point for developers looking to build apps on the blockchain. It’s often referred to the Amazon Web Services (AWS) of web3 and says it has seen a 10x increase in the number of teams building on its platform over the past 12 months. Its valuation has grown at a staggering rate, too, even for a crypto startup — it gained that $10.2 billion valuation just 16 months after it launched.

Its rapid growth has certainly garnered attention from investors, a group that includes high-profile names such as Lightspeed, Silver Lake, a16z, Coatue and Pantera. The company says it powers over $150 billion in transactions annually for clients including NFT platform OpenSea and DeFi app Quantstamp.

Alchemy, which aims to be the ‘de facto platform’ for developers to build on web3, is now valued at $10.2B

Its target, ChainShot, began as a hackathon project at the ETHDenver conference in 2018, ChainShot cofounder Cody McCabe told TechCrunch in an interview. McCabe, who was inspired to found ChainShot after going through a coding bootcamp himself, said the company was bootstrapped before Alchemy bought it. In addition to the founders’ personal capital (which McCabe said included funds formerly in his 401k), ChainShot covered its costs largely through grants available through its connection to the Ethereum ecosystem as well as through web3 crowdfunding platform Gitcoin, he added.

While ChainShot declined to share the actual number of students it works with, the company touted its 180% growth in student enrollment since January 2022.

Over half of the students that have gone through its program have landed jobs within six months after graduating, McCabe said. That certainly seems high compared to other coding bootcamps like Lambda School, which reportedly has around a ~30% placement rate — and it’s worth noting that many of the best-known coding bootcamps are believed to have exaggerated their placement numbers.

ChainShot founders Dan Nolan and Cody McCabe

ChainShot founders Dan Nolan and Cody McCabe Image Credits: ChainShot

Another web3 focused coding bootcamp, Encode Club, told TechCrunch in May that it had a 50%+ placement rate, similar to ChainShot, but it primarily accepted experienced coders into its program. ChainShot, in contrast, no longer has a vetting process for its students, and when it did in the past, it looked for “people that were trying to actively change and get into the ecosystem” rather than seasoned software engineers, McCabe said.

“We looked at all the education platforms in the space, and the results spoke for themselves in terms of ChainShot being the best,” Viswanathan said.

ChainShot’s program is currently built around its 10-week holistic bootcamp tailored toward developers looking to build on Ethereum, McCabe explained. The company plans to add more asynchronous content, such as videos, as it integrates with Alchemy and it also hopes to expand its offerings to other blockchains over time, he added, noting that ChainShot had just four employees this past year.

Once rolled up into Alchemy, ChainShot will join the crypto infrastructure company’s two other education-related properties, self-paced coding programs Web3 U and Road to Web3. It will also drop the fees it previously charged students and offer its product at no cost instead, a longstanding goal of ChainShot’s that is now possible under the Alchemy umbrella, McCabe said.

As for Alchemy, Viswanathan hinted that it would continue to keep an eye out for potential acquisition targets, particularly in the developer tooling space, as it looks to significantly expand its offerings with a team of 90 employees.

“We’re a small team … if we had 500 people, everyone would be working 24/7 and we’d pump out a bunch more products, but we have a lot of things that we just can’t build because of our bandwidth constraints in terms of engineering capacity. So we will always look to augment our services,” Viswanathan said.

“At the end of the day, it’s all about how to provide a great experience to people building in web3, and if we see a team that has a product that enables a better experience for our customers, we’ll definitely be excited about working with them,” he added.

Amid crypto’s talent war, Encode Club mints new web3 developers