Startup GRAIL Raises $900 Million to Detect Cancer the Earliest Ever

Grail announced they’ve closed a $900 million Series B round of financing.

The startup is pioneering technology that aims to take a blood sample and detect the early, free-floating cancer DNA floating in your bloodstream. They accomplish this with the help of a new DNA sequencing machine the company developed.

Several notable investors participated in this round of financing including Johnson and Johnson’s innovation arm.

“This cadre of world-class investors is a testament to their shared belief in our goal to reduce global cancer mortality through early detection,” GRAIL executive Ken Drazan said.

It’s looking like Grail may be nearing a major breakthrough, this is validated by preliminary data and the smart money that’s backing the endeavor. Needless to say this could have a ground breaking impact on the world. We’re pulling for ya Grail. As my southern country friends say “Git errrr done!”

Martel

JackThreads is Hanging on by a Thread: Looking For a Buyer

JackThreads, the online men’s retailer made some risky bets and they’re paying for it now. They’re looking for a buyer according to multiple sources. The Columbus, OH company founded by Jason Ross in 2008, got its start selling men’s urban wear at deep discounts in limited quantities. It quickly built a strong following and in 2010 the company was bought by the online publisher Thrillist. Five years later the two companies parted ways in 2015.

The C’mon Son!

In 2016 the company focused it’s offerings on their own brand of clothing and selling it at full price. Hmmm now why would a customer pay full price for your product when they are accustomed to getting it, along with your competitors gear at a discount on your very site?

The Double Whammy

In addition to changing the focus to their native brand, JackThreads embarked on a risky business model called TryOuts. This model allowed customers to order as much product as they wanted, let them try out the clothing, return what they didn’t like and paying only for what they kept. Shipping both ways was free for the customer. (This clearly put heavy downward pressure on gross margins.)

How’d That Work Out?

The TryOuts model was introduced in the Spring of 2016 and by Fall JackThreads was talking to investors about needing to raise more money. The latest reports are that JT is looking for a suitor. Anyone got a few extra mil laying around?

What would you have done differently? Hit me on the Gram.

Martel

Top 20 Reasons Why Startups Fail

We often hear about the success stories coming out of Silicon Valley… Uber, DropBox, AirBnB, etc. but did you know that approximately 75% of venture backed companies fail? According to a Statistic Brain study, 50% of all US companies fail after 5 years. CB Insights researched the top reasons why startups fail and here’s what they found.

 

 

The takeaways

  1. Tinker early and experiment with your product concepts, put it on the market and gauge the impact. Are people paying for your product/service? Is there a high rate of adoption? If yes, then great now build on that. If no, then iterate and try again. Pivot in a completely new direction if you must, but find a product/service that shows promise then double down. Don’t throw good money after bad. In other words, if there’s no product market fit don’t force it. Fail fast and keep it moving.
  2. Make Money. I’m a fan of bootstrapping businesses vs. taking a bunch of money you don’t really need. Having a ton of cash can be a gift and a curse. Build a revenue model into your business early on and reinvest that money into the business to grow. Once you’ve proven you don’t really need the money and you’re doing quite well on your own is when every VC will want to date you and lavish you with all kinds of nice gifts and cash (isn’t that how life goes ;-p). But I digress, develop a solid revenue model then take investor cash to expand more quickly if necessary.
    • There’s always exceptions to the rule. If you’re Instagram, Facebook or YouTube, with an alarming rate of adoption grab as much market-share as possible and worry about monetizing later. That’s only recommended if you’re experiencing exceptional growth.

That’s my take. What’s your experience been? Hit me on the Gram!

Martel

SoundCloud Is Struggling To Stay In Business

Big trouble in the cloud. The popular Berlin-headquartered music streaming startup SoundCloud is hemorrhaging money according to reports. SoundCloud can run out of money in 2017 if its recently launched subscription service doesn’t generate enough revenue.

In 2015 the company’s net losses increased by 30.9% to $52m. Sheesh!

Heads Are Rolling

With numbers like this there are bound to be some changes in upper management and the first casualties are the COO Marc Strigel and the vice president of finance Markus Harder. The company confirmed the departure of the two executives.

Don’t fret, SoundCloud is too popular to just disappear if things go south. If worse comes to worse a company will scoop them up for pennies on the dollar and keep the party going, while they figure out how to effectively monetize the ears.

Martel

Sneaker Startup GOAT raises $25 Million

Founded in 2015 the mobile sneaker marketplace GOAT is capitalizing on the love for fly kicks (sneakers). The company recently raised $25 million in a funding round led by VC firm Accel Partners. Here’s the lowdown on the company.

What Do They Do?

GOAT is a mobile-based sneaker resale marketplace. The company acts as a middleman between buyer and seller and provides the service of verifying the authenticity of the goods.  They hold the funds in escrow until the product is verified. All the while GOAT takes a cut for their efforts. It’s a win win for all parties involved. Makes ya say dang why couldn’t I think of that.

Product/Market Fit?

Membership has reached 1.5 million customers with an average order per transaction of $330 according to TechCrunch. Yep, looks like the product is fitting with the market quite well.

Total Funds Raised

To date the company has raised a total of $37.6 million.

What Do They Plan To Do With All Of This Dough?

GOAT plans to use the new funding to fuel its growth by hiring new engineering, operations, product and marketing specialists. It will also invest in new facilities to bolster its operations and logistics.

Who’s the Chief?

Eddy Lu is the co-founder and CEO of GOAT

 

GOAT Verification

Goat Employee inspecting the product above.

 

Martel

Snapchat Officially files for $25 Billion IPO.

Snap Inc., the parent company of Snapchat, has officially filed the paperwork to begin selling shares of their company to the public. Here’s the quick and dirty:

  • SNAP will be listed on the NYSE.
  • The company’s valuation is expected to be over $25 billion when it goes public.
  • March 2017 is the IPO target date.
  • Snap has 160 million daily users (growth slowed by 82% thanks to Instagram copying their key feature with Instagram Stories).
  • $400 million in revenue in 2016
  • Snapchat paid $114.5 million for mobile search engine Vurb.
  • The stock to be issued does not come with voting rights. Total control will be retained by company co-founders Evan Spiegel and Robert Murphy.

Hmmm not sure how I feel about that last point. Effectively the shareholders have no say in the management of the company.

What do you think? Will you be lining up to cop SNAP’s stock in March?

Martel

 

The Bouqs, Flower Delivery Service Raises $24 Million

Who needs another flower delivery service right? I mean we already have 1-800-flowers, FTD, UrbanStems, etc. and now The Bouqs.

What’s So Special About The Bouqs?

To date the company has raised a total of $43 million. In their recent Series C financing they raked in $24 million. Apparently some knowledgeable & wealthy people believe in The Bouqs. The LA-based startup founded in 2012, delivers nice bouquets (See where the name came from?). The Bouqs differentiates itself by cutting out the middleman by sourcing its flowers directly from the farms. As a result this reduces the cost and brings the consumer longer lasting flowers.

This has been a winning strategy for the company because according to co-founder John Tabis, they had a profitable 4th quarter in 2016. The Bouq is raising money in order to scale faster and compete with the big dogs. They have their work cut out for them. The Bouqs’ major competitor 1-800-flowers generated $1.2 billion in revenue in 2016. Sheesh!

Good luck Bouq. The grind salutes you for coming this far. Now keep going.

Martel

 

Interesting did you know… The Bouq pitched their startup on Shark Tank.

Cisco Scoops Up AppDynamics for a Measly $3.7 Billion Hours Before their I.P.O.

Just before the software developer AppDynamics was set to launch their Initial Public Offering Cisco puts the kibosh on things and drops a big bag of cash off. $3.7 billion (cash) is what it took to put an end to all this silly talk of AppDynamics going public.

Cisco appears to really like this company because they’re paying a $1.8 billion premium over AppDynamics’ last private equity valuation of $1.9 billion.

What’s So Special About AppDynamics?

AppDynamics develops software to help companies like eHarmony to Expedia monitor their mobile apps and websites for bugs and fix them before customers are impacted. They help companies save millions of dollars and in return they charge a nice fee for this service. The company was founded in 2008, and according to CNBC in the first 9 months of 2016 they generated $158.4 million. This is a 54% increase over the previous year’s revenue for the same period.

Why Does Cisco Care So Much?

Cisco is becoming the old guy on the block and needs to adapt quickly. Cisco grew in previous decades into the behemoth that it is by providing the big switches and routers needed in computer networking that helped to fuel the growth of the internet. Today, instead of buying big branded hardware, companies are demanding commodity equipment that can be run by less expensive software. This is where AppDynamics fits in. They provide software products that are in high demand and this purchase helps Cisco pivot towards the future.

Check out this story from Forbes Magazine on of how AppDynamic’s founder, Jyoti Bansal, came to America from India to pursue his dream and created a multi-billion dollar software empire.

Martel

32 Year Old Tristan Walker Founded One of Silicon Valley’s Hottest Startups: How’d he do It?

Tristan Walker is a 32 year old African-American who founded one of the hottest startups to come out of Silicon Valley. Let’s take a look at his path to launching a successful health and beauty empire.

Tristan grew up in Queens, NY graduated from The State University of New York at Stony Brook in 2005. After a few years working as an Energy Trader first for Lehman Brothers then J.P. Morgan, he enrolled in Stanford’s Graduate School of Business where he graduated in 2010.

It was in grad school at the age of 24 where his eyes were opened to another world of possibilities.

“I was 24 and I said, ‘Damn, there are other 24-year-olds not only making millions of dollars, but fundamentally changing the world. I need to be a part of this.’”

While in grad school he interned with Twitter and the Boston Consulting Group in 2009. Upon graduating, Tristan landed a gig with the then hot startup Foursquare as Director of Business Development from 2009-2012. In 2012 he co-founded Code2040, an org that helps gifted minority undergraduate students find internships at the top technology companies. He learned the venture capital game by spending a year working at Andreesen Horowitz (2012-2013) as “Entrepreneur In Residence.” In 2013 Tristan stepped out on his own and launched Walker & Co. the firm that created the hugely successful Bevel brand.

Walker & Co. has raised over $33 million from investors such as his former employer Andreesen Horowitz and rapper Nas’ VC firm Queenbridge Venture. In three years Walker & Co. has successfully established its Bevel branded products which include a specially designed shaving system geared toward men of color. The company has developed strategic partnerships with Target and Amazon and has increased total sales by 5% per week since February of 2016! In 2017 Walker & Co. are planning to launch a brand geared towards women.

The Takeaways

  1. Education Is Key
  2. Work Hard
  3. Don’t Be Afraid To Fail

Education is key! It opened up a tremendous amount of opportunities for Tristan. His undergrad degree lead to a job on Wall Street, which lead to attending grad school in Silicon Valley, which lead to working at a venture capital firm that ultimately financed his startup. He took calculated risks which lead to the launch of Walker & Co. and it paid off. The rest as they say is history.

Martel

Multi-Billionaire John Paul Dejoria’s 3 Keys To Success When Starting a Business

John Paul Dejoria is an entrepreneur best known for co-founding Paul Mitchell Systems, a haircare company and Patron Spirits, a world renown tequila brand (I’m sure we all had a few shots). Forbes Magazine estimates his net worth to be approximately $2.9 billion. I think it’s safe to say he’s had some success in business. Paul recently dropped a few gems on the key ingredients to starting a successful business.

1. Be The Best In Your Category

Make the best product you possibly can. The end result should be when the consumer tries your product or service it is something they want again.

2. What’s Your Story?

Have a story behind your product that is true. Be authentic.  Then be willing to tell enough people your story and why your product is the best. You can have the best product in the world but if no one knows about it what good is it?

3. It’s Cheaper to Keep Her

Once you get a customer put your personality into it and really let them know how much you appreciate them. It’s harder to get a new customer than it is to retain your existing customers. Pay great attention to your first customers. They will be your ticket to new ones via word of mouth.

Martel

Meet the 5 Most Valuable Startups in America

5. WeWork

Valuation: $16.9 billion

Coworking startup

WeWork cofounders Miguel McKelvey and Adam Neumann

 

4. Snap

Valuation: $18.19 billion*

Formerly Snapchat, is a social media/camera company

CEO Evan Spiegel

 

3. Palantir

Valuation: $20.53 billion

Data-mining startup

CEO Alex Karp

 

2. Airbnb

Valuation: $30 billion

Home-rental startup

Product chief Joe Gebbia, CTO Nathan Blecharczyk, CEO Brian Chesky

 

1. Uber

Valuation: $68 billion

Ride-hailing startup

CEO Travis Kalanick

 

*Elon Musk gets an honorable mention. His aerospace manufacturing and space transport services startup, SpaceX comes in 6th place with “only” a $12 billion valuation. Poor fella.

Be inspired my friends, be inspired! Are you working on the next big thing? Hit me on the Gram.

Martel

Ice Cube Launches New 3 on 3 Basketball League for ex-NBA Ballers. Will you be Tuning In?

Ice Cube has announced he will be launching a traveling basketball league for retired NBA players, called the Big 3 league. It’s set to launch this summer after the NBA playoffs. Former Heat player and deputy director of the National Basketball Players Association, Roger Mason Jr. will be joining Cube and his business partner Jeff Kwatinetz to help run the league.

Cube tells The Vertical:

“I thought of this concept as a fan who got sick of seeing his heroes retire and not play anymore. A lot of these guys can still play once they retire – just not the back-to-backs or four games in five nights. I started to look at three-on-three basketball and wondered, ‘Why isn’t this played on a pro level?’ It’s the most normal form of basketball. And from there it was like, ‘Yo, why don’t we make this happen?’

So far ex-ballers  Jermaine O’Neal, Kenyon Martin, Rashard Lewis and Jason Williams have signed on to play in the league and Gary Payton will be a coach.

Smooth move Cube! This could be something “bigly.” It fills that void when there’s nothing much going on between the NBA finals and the start of the NFL football season. Will the Big 3 League prove to just be a passing novelty or something more permanent? Either way you gotta admire Cube’s audacity for taking a “shot!” They say you miss 100% of the shots you don’t take.

Kudos Cube! Will you guys and gals be tuning in? Hit me on the Gram.

Martel

Vine Co-Founders Launch New App: Hype!

Shortly after Twitter announced it was killing off Vine last month, Vine co-founders Rus Yusupov and Colin Kroll announced their next great startup, Hype.

What is it?

Hype is a live-streaming video app currently available for the iOS platform.  It’s live streaming with a lot more bells and whistles than you’ve seen on the likes of Facebook Live and Periscope. For instance, broadcasters can easily incorporate multimedia into their streams i.e. layer in photos, videos, music, GIFs, etc. This allows for more creative freedom to help broadcasters engage, entertain and ultimately build their following.

 

There’s a lot of competition in this space. It’s going to be tough to break through, especially with the juggernaut, Facebook copying every cool feature of its competitors these days.

The old Vine crew broke through once let’s see if they can do it again. We’re rooting for ya. Excuse me as I get my popcorn and enjoy this show.

 

What do you think? Will HYPE live up to the hype?

Martel

When Starting a Company is it Better to have Co-Founders or Go Solo?

Many investors frown upon startups that only have one founder. This makes a lot of sense because it is extreeeemely challenging to start a company and even more stressful when you don’t have a co-founder to shoulder some of the pressure. I was the sole proprietor of a frozen yogurt shop for a few years before I sold it and let me tell you… running a small business can be more stressful than you can imagine (and also rewarding). There’s no one that can really fully understand the pressures except another partner who’s in the trenches with you. So imagine the angst of running a startup that’s raised millions of dollars the pressures of developing a thriving business is even greater. With all of that stress on one person it seems companies with one founder should be less successful.

With that said, the data seems to suggest betting on solo founders isn’t such a bad bet after all. According to CrunchBase there are 7,348 companies that have raised more than $10m and of those companies almost half are run by solo founders.

The breakdown:

  • One founder: 45.9%

  • Two founders: 31.9%

  • Three founders: 15%

  • Four founders: 5.3%

  • Five or more founders: 1.9%

Similarly companies with successful exits (sale of the comp, IPO, etc.):

  • One founder: 52.3%

  • Two founders: 30.1%

  • Three founders: 12.5%

  • Four founders: 3.7%

  • Five or more founders: 1.4%

From the data it would appear the more founders you have the less likely you are to succeed…. huh go figure.

What’s been your experience? Hit me on the InterGram thing.

 

Martel

 

Startup: So What The Heck is the Difference Between Series A, B and C Rounds of Funding?

In the startup world you often see headlines of company X raising a gazillion dollars in a Series A, B or C round of funding. What does this actually mean? Like most people on the outside looking in all I really knew was the companies were receiving funds in order to continue growing their businesses. Anything after that was Greek to me.  I decided to dive a little deeper and here’s what I discovered.

  • Seed Round – So you’ve  come up with a great idea but you need funds to get the idea off the ground and really test if there’s a market for your product or service. You’re planting the seed for your business. Once you’ve tapped out of finances from friends, family and your personal stash to jump start the business, in comes Angel investors. These investors typically provide the funds for this early stage of your business for a percent of the company, naturally. Angel investors are wealthy individuals with a minimum net worth of $1 million who  earn over $200k per year in income. During the Angel round of investing startups typically raise $150k to $2m.
  • Series A Round – Now that the business has developed a track record and has exhibited good signs that it’s a going concern it’s time to improve the product and begin scaling up. This is where the big boys and ladies come in. Venture Capital firms invest heavy paper aka boat loads of cash in exchange for their piece of the pie (of course) and lending their expertise and knowledge. Series A rounds typically raise approximately $2m to $15m.
  • Series B Round – This round is similar to the previous one. Many of the same VC players are involved. The goal here is expanding the company’s reach, acquiring the proper talent for the organization, increased marketing and advertising takes place in this round. The funds raised at this stage run between $7m to $10m.
  • Series C Round – At this point you’re clearly a successful company. You may need funds for a strategic acquisition, or  expansion into foreign markets, etc. In addition to the VC firms, Angel and other early investors you have some new faces.  Hedge Funds, Investment Banks and Private Equity Bankers enter the fray here. They have a ton of cash and expertise that they infuse into the company to continue the expansion.
  • IPO – The Investment Bankers can help bring the company to public markets via an “Initial Public Offering.” This allows us common folk to get a piece of the pie by purchasing shares via our favorite trading platforms/brokerages. We own a portion of the company and in exchange they receive funds (the cost of each share purchased) to further develop the business.

 

ABC

Now you know your A,B,C’s!

 

Martel

Check out Investopedia for more details on the different stages of funding.