Tag: Series B funding

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Show, don’t tell: Tips for robotics startups raising a Series B during a downturn

Jason Schoettler Contributor
Jason Schoettler is co-founder and managing partner of Calibrate Ventures.

Raising a Series B for any startup is challenging right now, with many VCs pulling back on investments — funding for Series B rounds across all sectors fell 55% in August compared to a year earlier, for example.

But raising a Series B for a hardware startup can be even tougher. It has simply always been more difficult to get venture investors to fund a robotics project compared to a software-only venture, given robotics’ high capital requirements and the greater risk.

However, the climb uphill can get much easier if a robotics startup can showcase a solid business model, measurable metrics and a plan for the next 18 months. As an investor in AI and automation companies for over 20 years, I’ve backed dozens of robotics companies, and I continue to be bullish on the space.

You need to show that customers are deriving real value from your robots — saving time, money or both.

Here are several strategies founders can use to prepare their robotics companies for a successful Series B.

Show how your robot works

Robots are inherently visual (can anyone forget that video of Boston Dynamics robots dancing?) So when you pitch VCs on your automation company, it pays to demonstrate your robots in action.

If your robots are large installations in warehouses or on manufacturing lines, invite VCs to come to see them working. If they are small enough to transport, bring them with you to the pitch meeting. And always have high-quality video available to share on a computer or tablet during in-person pitches or online for virtual meetings. Seeing your product in action is critical to getting investors excited about it.

Show customer ROI

Show, don’t tell: Tips for robotics startups raising a Series B during a downturn by Ram Iyer originally published on TechCrunch

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How to create a due diligence road map for Series B investors

Gaetano Crupi Contributor
Gaetano Crupi is a partner at venture capital firm Prime Movers Lab. He serves on the boards of OCEANIX, Atom Computing, Conscious Cultures and MycoWorks.
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I previously wrote about the “holy trinity” of materials that startups should have in their Series B data room: memo, deck and forecast. These three key documents should do the heavy lifting of capturing attention and communicating information across the partnership with high fidelity.

Now, I want to highlight how founders can tie these materials together for investors. If done well, these materials, along with various phone calls and presentations, will create the blueprint and backbone for an in-depth Series B due diligence process.

This blueprint is important because someone will likely read every single document in your data room, and you do not want them to get lost. Instead, you want to make their job very easy. The next set of materials falls squarely under the “minimize work” objective. By making things easy, you increase the chances of the outcome being in your favor.

Series B companies generally have sales, detailed cost breakdowns, forecast actualization records, patents, board presentations and more. There is a lot of information to go over because you have been around for a lot longer than a seed stage or Series A company.

The best offense is a strong due diligence questionnaire

Don’t make your data room so complicated that investors can’t find their way out of the details into accepting your arguments.

As an investor, I’m shocked that I don’t see DDQs more often. Not to be confused with a legal DDQ, this DDQ is often a 60- to 80-page document divided into sections and answering questions that investors will invariably ask.

Some questions will be straightforward. For example:

  • When and how was the company founded?
  • Please discuss the company’s vision and values.
  • How many employees does the company currently employ?
  • Please summarize the relevant expertise and experience of the management team.

The DDQ offers a good reference guide for such simple questions. It also should include some preemptive questions that investors like to ask, such as:

How to create a due diligence road map for Series B investors by Ram Iyer originally published on TechCrunch

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Getting serious about Series B: 3 documents that will help founders control the narrative

Gaetano Crupi Contributor
Gaetano Crupi is a partner at venture capital firm Prime Movers Lab. He serves on the boards of OCEANIX, Atom Computing, Conscious Cultures and MycoWorks.
More posts by this contributor

I have now been an investor for two years after 15 years of entrepreneurship. If I had instead been an investor for two years and then gone out on my own, I would have saved myself a lot of heartache!

I have spent most of the last two years investing at Series B and helping portfolio companies prepare for this first “growth-y” round. There is a marked difference in what a Series B company is expected to look like versus a Series A company. As an entrepreneur, you have limited time to project that maturity to prospective funds.

This is one of the lessons I wish I understood when raising a Series B, so I hope you find this advice helpful when you navigate your larger raises. In this column, I will cover the key materials and collateral that will help you communicate your ideas successfully across a partnership.

A key complication as you progress from seed to Series A and then to Series B is that the bigger check size invariably means more people are involved in getting to a “yes.” Every venture firm has its own idiosyncrasies in how it votes, but understanding that you are truly “dating” the entire firm when you get to larger rounds is a vital insight that I never appreciated. This means you need to understand how to create materials that survive a brutal game of telephone from associates out to prove their smarts to founding GPs managing insane travel schedules.

A good strategy memo becomes the guideline for how the entire diligence process unfolds.

A Series B data room can be overwhelming. You want to proactively manage the order in which people access information and focus their attention on a few key documents that they can return to when they fall down a rabbit hole. Founders should think of three primary documents as their “holy trinity”: the deck, the strategy memo and the forecast model. These documents should do most of the heavy lifting for capturing people’s attention and ensuring that information is transferred within the partnership with high fidelity.

You want people to focus the vast majority of their attention on these three pieces of information. This is a great way to control the narrative and ensure that what you want to be transmitted is received by the other parties.

An elegant strategy memo is your most important document

Over the past few years, the strategy memo has emerged as a key part of initial diligence packages. Some people refer to it as a company-written investment memo, but I prefer the “strategy memo” title, because it’s not really an investment memo, which comes with scenario analyses, exit plans and other sections that would be awkward and a bit presumptuous for a company to externalize.

I have also heard it referred to as a “narrative deck” — basically a detailed, written version of your pitch. I also do not think this fully captures a great strategy memo, as it is more than just the deck. I see the deck almost as a derivative of the strategy memo.

Getting serious about Series B: 3 documents that will help founders control the narrative by Ram Iyer originally published on TechCrunch

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AI-powered competitive enablement platform Klue lands $62M led by Tiger Global

Klue, an AI-powered competitive enablement platform, has raised $62 million in Series B funding led by Tiger Global, with participation from Salesforce Ventures. The Vancouver-based company combines intel collection capabilities with a modern approach to content distribution aimed at providing users with the insights needed to drive revenue and business impact.

The platform automatically gathers competitive data from public and private external sources such as the news and competitor web page changes, as well as data from internal teams through integrations with platforms like Slack, Highspot and Salesforce. Klue aims to enable product marketers and competitive intelligence teams to increase their coverage of competitors.

“Our platform makes it easier to update competitive content, keep the organization informed on market changes, and enables sellers with real-time access to insights to improve competitive deal performance,” Jason Smith, the CEO and co-founder of Klue, told TechCrunch.

Smith outlined that Klue plans to use this latest round of funding to invest heavily in product development. The company will double down on its AI capabilities to make insight generation easier in order to unlock opportunities to expand its user base through new market development. Klue also plans to invest in product experience for its end-users to create a seamless connection between revenue teams and their access to competitive insights. It notes that the funding will also fuel its expansion into new verticals and markets.

Klue

Image Credits: Klue

Klue’s Series B funding follows its $15 million Series A round announced in September 2020. The round was led by Craft Ventures with participation from HWVP, existing investors OMERS Ventures, Rhino Ventures and BDC Ventures, along with several angel investors.

In terms of growth, Klue has seen 3x customer growth since its previous funding round. The company has served nearly 400 enterprise clients and more than 110,000 users since its launch in 2017.

“Our vision is for every department of every business to have a relevant, personalized and continuously updated lens into their competitor’s world. This system will be machine and human-driven, automatically pulling raw intel from your co-workers, internal systems and across the web and curating it into organized, actionable insights,” Smith stated.

Regarding future plans, Klue plans to find ways to reduce the burden of collecting intel and also automate insights. The company wants to introduce deeper integrations with enterprise tools like Slack, Salesforce, Gong, Highspot and Gainsights. Klue also plans to launch multi-user, collaborative and security features in the future. These features will allow users across departments to work independently and collectively within the same system.

The company also sees a future where Klue will support smaller companies with a lighter self-serve product. It also sees itself supporting B2C companies, such as retail and CPG companies that are concerned about competitive pricing, positioning, packaging and distribution. 

“We truly see Klue becoming the standard operating system for companies to see and know their competitor’s every move,” Smith said.