May 16, 2020
Photo: Courtesy of Haus
Hello and welcome to Pipeline.Congratulations on surviving another week at home! I'm excited for my new weekend tradition of switching to my off-the-clock Zoom background. Anyway, on with business. This week: Competition for Clubhouse, the three letters still driving CEOs nuts, and what's happening in party rounds, according to three founders with more than 250 investors between them.
If you were forwarded this email, be sure to sign uphere.
For years, traditional investors decried party rounds with lots of investors, believing they were bad for companies and only useful for name-dropping. Amid the coronavirus pandemic, those whispers have returned.
But a reliance on bigger investors doesn't match what Helena Price Hambrecht, co-founder of DTC alcohol startup Haus, is seeing.
In reality, there's risk on both sides: Party round startups could find it harder to raise from a large number of people during a downturn — but they could also raise more quickly.
So savvy founders are starting to do hybrid party rounds, combining two to four traditional VCs with a giant group of angels, said Hunter Walk, a partner at Homebrew who also invested (both personally and through his fund) in Haus.
And the hybrid approach can have huge benefits, Rahul Vohra, the founder of Superhuman, told me. He has over 120 investors in the company, which includes a bunch of angels but also A16Z.
The key to all this may be a broader recognition in the funding community that party rounds are, you know … OK.
Nasdaq Boardvantage is best positioned and qualified to support your team during challenging times. Our tools and information equip boards and executives to work at peak performance from anywhere in the world.
What's one of your new quarantine habits?
I've been writing every day to be able to share weekly essays for my newsletter, Next Big Thing. I've struggled to make a habit of writing over the years, but the shelter-in-place has given me the opportunity to make it a morning ritual, and I'm loving it.
Who is a person in tech you've never met but would love to have dinner with?
Tobi Lutke, Shopify's founder/CEO. I've listened to several podcast interviews of his, and his product/business/strategy mind, as well as his empathy, have really impressed me. We also both grew up in Europe and moved to North America in the same year (2002), so we would have at least one thing in common to discuss over dinner.
What's your favorite part of a startup's pitch?
The first 5 minutes. If the first 5 minutes are special — because of the founder's story, or the mission, or the quick product demo, or the simple but powerful framing of the opportunity — I can sense you're onto something, and I'll be leaning in for the rest of the pitch.
What was your first check?
The first investment I worked on was ClassDojo, when we led the series A in 2013. The first investment I led and joined the board of was The Farmer's Dog, when we led the series A in 2017. The investment thesis for both was similar: mission-driven founders, early signs of consumer love and product-market fit, and opportunity to build a big business with decades-long customer relationships. The founders of both companies have become close friends, and it's been special to have seen their journeys from the front-row seats.
What's one app you use all the time that most people haven't heard of?
I just started using Grain to take notes during my Zoom calls, and wow, I'm blown away. Your notes get time-stamped to the video and you can highlight and share video clips from the call. It's magic, and suddenly Zooms feel more productive than regular calls or in-person meetings (where obviously the conversation can't be recorded!). Not an investor, just a fan.
Thanks for reading this week's Protocol Pipeline. If you like what you're reading, sign up here to get it in your inbox. Send story tips and Pipeline feedback to email@example.com. Otherwise, stay safe, stay healthy and stay home. See you next week.