Returning the fund. Millennials invest in values. Amazon only has eyes for its customers.

Slingin' that crack

Hi there,

One clear impact of the SoftBank Fund is some VCs using it as an opportunity to promote the inane idea that raising more money increases your chance of success.

See the below commentary from a VC (via Fortune's Term Sheet).



When I talk to our early-stage VC clients, they're not worried about SoftBank. They're hoping their portfolio companies figure out their market, product, business model, etc.

Also, there are no facts — zero — that suggest raising more money is predictive of success.

Babe Ruth vibes

Great venture capitalists know they have to swing — and strike out — a lot to hit the occasional home run. Those investment wins often make up for all the losses and then some. They "return the fund."

We analyze 28 of the biggest VC grand slams of all time — from WhatsApp to Twitter to Groupon — to see what they have in common.

Don't be pressured

In the last few years, we've had 6 companies that are in similar or in nearby markets to us raise more money than us.

Every time one of them raises, we get calls from VCs saying something like "ABC co just raised. Are you thinking about raising given insert lame justification?"

I'm happy to announce most of those competitors have failed or are failing.

I talked about this in our presentation covering 68 mistakes SaaS startups make.

Emotionally invested

Millennials stand to inherit ~$30T from baby boomers, and they plan to put their money where their principles are. Millennial investors are 2x more likely than the average investor to make a sustainable investment.

This is driving wealth tech startups to create low account minimum, low fee investment products that align with investors' values. We highlight a few of these startups and look at the impact investing trend here.

Blast off

Sometimes startups overfed with financing go under because they can't tighten up operations enough to turn a profit.

Zalando is not one of those.

High burn rate and profit doubts didn't stop the online retailer
 from continuing to raise funds. It turned a profit for the first time in 2014, the same year it went public. 

At a $6.8B valuation, Zalando's IPO is the biggest exit of a Rocket Internet portfolio company to date. It's performed well as a public company, with its stock up nearly 150% since IPO and a market cap of $11B+ as of March 2018. Read more VC-backed exit success stories here.

That's all I have to say about that

When talking about the competition, Apple and Google have the most to say. They mention each other on earnings calls more than any other FAMGA pairing.

Amazon, on the other hand, has no comment on the competition. Instead, it focuses on how to grow its products to add more value for customers. Check out the full analysis here.

Permafrost problems

At dinner during the March CB Insights Councils meeting, a c-suite-level member introduced the concept of “permafrost” — that layer of big company middle management where innovation initiatives get mired down.

Council members talked it through — and agreed the best way for senior executives to bust through permafrost is to communicate directly with front-line employees.

If you’re an SVP or higher at a company with $1B+ in revenue in need of wisdom from your peers, or if you have wisdom to share with peers, apply to join CBI Councils here.

The Industry Standard

CB Insights data is the most trusted by those in the industry and the media. A few recent hits.

Bloomberg. Shuli Ren (@shuli_ren) writes about how China plans to use Chinese depository receipts to help its unicorn companies and refers to CB Insights unicorn data.
Entrepreneur. Georg Richter digs into what makes a retailer with subscription offerings successful and cites CB Insights research.
Business Insider. Zoe Bernard (@zoesaintbernard) writes about Facebook users’ mistrust of the platform, citing a CB Insights survey.

I love you.


P.S. On March 29, we'll be exploring trends and technologies affecting the agriculture industry. Sign up for the briefing here.

P.P.S. 10 days until Future of Fintech prices go up. Save $500 on your ticket by using discount code fintechfun.

The Blurb

A curated mix of articles worth sharing.

Hot water. Mark Zuckerberg says he will gladly testify before Congress “if it’s the right thing to do.”
Didn’t we almost have it all? Before its downfall, Yahoo created many of the apps and services we now use every day.
Fast Company
New policy. YouTube is banning videos that promote or link to websites that sell firearms and accessories such as bump stocks.

Higher and higher. The Federal Reserve has announced a quarter-point increase in interest rates. This is the first move under new chairman Jerome Powell.
Make it rain. Secure messaging company Mainframe released thousands of dollars of free digital money in the form of cryptocurrency tokens falling from balloons.
Skeptical. Customers should be wary of robo-advisers like Wealthfront that are moving away from low-fee passive investing.

Miracle on 34th Street. Macy’s will bring VR furniture showrooms to 50 stores by this summer.
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