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What to expect while fundraising in 2021

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At the end of 2019, no one would have predicted what an unpredictable and difficult year it has been for both startups and VCs in the fundraising world. Now we are staring down the end of 2020 and looking toward what we all hope is a better, safer 2021. What will this new year bring? With an end-of-year sprint to close deals, the anticipation of a new presidential administration and the hope of a COVID-19 vaccine on the horizon, startups and VCs know that change is on the horizon — but how much of that change will be positive?

As 2020 proved, no one can say for sure what 2021 will bring, but I’d like to put a few predictions on the table based on DocSend’s data and research, including the DocSend Startup Index, as well as some trends I’ve seen and my own experiences. These predictions center around how we’ll fundraise post-pandemic, how the funding divide may widen for some, what fundraising activity could look like into 2021, a few sectors we think will fare well and will incorporate some tips on how to succeed in the new year, no matter what comes our way.

We’ll interact through a mix of the old and the new

The pandemic forced all of us to drastically change how we work and interact with colleagues and clients. When the pandemic subsides and vaccines are widely available, in-person meetings and gathering back at the office will definitely resume, but it’s safe to say the old ways of networking and fundraising won’t shift back 100%. Founders and VCs alike have navigated the ups and downs of remote networking and fundraising interactions and will stick to what works and what doesn’t.

Is traveling to a conference the best way for a founder to have a chance at meeting the VC who is right to support their business? Will a VC want to drive an hour through Bay Area traffic for an in-person status update meeting on their latest investment? Zoom fatigue aside, video conference calls do have some benefits — efficiency, no travel time — although not all meetings are best conducted virtually.

No matter what 2021 has in store, founders can still take proactive steps to help them succeed in their fundraising efforts.

The extent to which businesses go in-person or stick to virtual meetings could depend directly on what round of fundraising they are working toward or have completed. Businesses in the pre-seed round might stick with more Zoom meetings in order to conserve resources.

Founders in the seed round will likely split between video and in-person meetings as they are under pressure to show traction in this round, as we found in our report on seed fundraising, yet will also need to conserve resources and time. For Series A, they might have to meet less in person because they have established relationships with their investors. Series B might see more in-person meetings as their business has reached a level of complexity that is difficult to communicate via a deck or video conference.

The funding divide may widen for those outside Silicon Valley

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Unpacking Chamath Palihapitiya’s SPAC deals for Latch and Sunlight Financial

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This morning, investor and SPAC raconteur Chamath Palihapitiya announced two new blank-check deals involving Latch and Sunlight Financial.

Latch, an enterprise SaaS company that makes keyless entry systems, has raised $152 million in private capital, according to Crunchbase. Sunlight Financial, which offers point of sale financing for residential solar systems, has raised north of $700 million in venture capital, private equity and debt.

We’re going to chat about the two transactions.

There’s no escaping SPACs for a bit, so if you are tired of watching blind pools rip private companies into the public markets, you are not going to have a very good next few months. Why? There are nearly 300 SPACs in the market today looking for deals, and many will find one.


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Think of SPACs are increasingly hungry sharks. As a shark get hungrier while the clock winds down on its deal-making window, it may get less choosy about what it eats (take public). There are enough SPACs on the hunt today that they would be noisy even if they were not time-constrained investment vehicles. But as their timers tick, expect their dealmaking to get all the more creative.

This brings us back to Chamath’s two deals. Are they more like the Bakkt SPAC, which led us to raise a few questions? Or more akin to the Talkspace SPAC, which we found pretty reasonable? Let’s find out.

Keyless locks = Peloton for real estate

Let’s start with the Latch deal.

New York-based Latch sells “LatchOS,” a hardware and software system that works in buildings where access and amenities matter. Latch’s hardware works with doors, sensors and internet connectivity.

The company has raised a number of private rounds, including a $126 million deal in August of 2019 which valued the company at $454.3 million on a post-money basis, according to PitchBook data. The company raised another $30 million in October of 2020, though its final private valuation is not known.

As Chamath tweeted this morning, Latch is merging with TS Innovation Acquisitions Corp, or $TSIA. The SPAC is associated with Tishman Speyer, a commercial real estate investor. You can see the synergies, as Latch’s products fit into the commercial real estate space.

Up front, Latch is not a company that is only reporting future revenues. It has a history as an operating entity. Indeed, here’s its financial data per its investor presentation:

Doing some quick match, Latch grew 50.5% from 2019 to 2020. Its software revenues grew 37.1%, while its hardware top line expanded over 70% during the same period. So, the company’s revenue mix shifted more towards hardware incomes in 2020.

That could be due to strong hardware installation fees, which could later result in software revenues; the company claims an average of a six-year software deal, so hardware revenues that are attached to new software incomes could lowkey declaim long-term SaaS revenues.

While some were quick to note that the company is far from pure-SaaS — correct — I suspect that the model that will get some traction amongst investors is that this feels a bit like Peloton for real estate. How so? Peloton has large hardware incomes up-front from new users, which convert to long-term subscription revenues. Latch may prove similar, albeit for a different customer base and market.

Per the deal’s reported terms, Latch will be worth $1.56 billion after the transaction. And the combined entity will have $510 million in cash, including $190 million from a PIPE — a method of putting private money into a public entity — from “BlackRock, D1 Capital Partners, Durable Capital Partners LP, Fidelity Management & Research Company LLC, Chamath Palihapitiya, The Spruce House Partnership, Wellington Management, ArrowMark Partners, Avenir and Lux Capital.”

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Calling Swedish VCs: Be featured in The Great TechCrunch Survey of European VC

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TechCrunch is embarking on a major project to survey the venture capital investors of Europe, and their cities.

Our survey of VCs in Stockholm, and Sweden generally, will capture how the country is faring, and what changes are being wrought amongst investors by the coronavirus pandemic.

The deadline is the end of this week.

We’d like to know how Sweden’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and, generally, how your thinking will evolve from here.

Our survey will only be about investors, and only the contributions of VC investors will be included. More than one partner is welcome to fill out the survey. (Please note, if you have filled the survey out already, there is no need to do it again).

The shortlist of questions will require only brief responses, but the more you can add, the better.

You can fill out the survey here.

Obviously, investors who contribute will be featured in the final surveys, with links to their companies and profiles.

What kinds of things do we want to know? Questions include: Which trends are you most excited by? What startup do you wish someone would create? Where are the overlooked opportunities? What are you looking for in your next investment, in general? How is your local ecosystem going? And how has COVID-19 impacted your investment strategy?

This survey is part of a broader series of surveys we’re doing to help founders find the right investors.

https://techcrunch.com/extra-crunch/investor-surveys/

For example, here is the recent survey of London.

You are not in Sweden, but would like to take part? That’s fine! Any European VC investor can STILL fill out the survey, as we probably will be putting a call out to your country next anyway! And we will use the data for future surveys on vertical topics.

The survey is covering almost every country on in the Union for the Mediterranean, so just look for your country and city on the survey and please participate (if you’re a venture capital investor).

Thank you for participating. If you have questions you can email mike@techcrunch.com

(Please note: Filling out the survey is not a guarantee of inclusion in the final published piece).

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Goalsetter raises $3.9 million to teach financial literacy to kids

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Goalsetter, a platform that helps parents teach their kids financial literacy, announced the raise of a $3.9 million seed round this morning, led by Astia.

PNC Bank, Mastercard, US. Bank, Northwestern Mutual Future Ventures, Elevate Capital, Portfolia’s First Step and Rising America Fund and Pipeline Angels also participated in the round. The round also saw participation from a handful of individual investors including Robert F Smith, Kevin Durant, Chris Paul, Baron Davis, Sterling K. Brown, Ryan Bathe, CC Sabathia and Amber Sabathia.

Goalsetter launched in 2019 out of the Entrepreneurs Roundtable Accelerator. Founded by Tanya Court, who lost over $1 million in the 2001 bubble burst, the platform teaches financial literacy to children of all ages, helping them learn economic concepts, lingo and the principles of financial health.

After long stints at Nickelodeon and ESPN, Court understands deeply how kids learn and what keeps their attention. She vowed to make sure that her children were never ignorant of what it takes to protect their wealth and create more.

The app also allows parents to give allowance through the app, and even pay out their own specified amount for every quiz question the kid gets right in the app. Plus, family and friends can give ‘goal cards’ instead of gift cards, helping kids save for the things they really want in the future.

The company recently launched a debit card for kids, as well, letting parents control the way the card is used and even lock it until their kids have passed the week’s financial literacy quiz.

Families save an average of $120 a month on the platform, and Court says that two families saved over $10,000 in the last year.

The company is also launching a massive campaign next week for Black History Month with the goal of closing the wealth gap among Black children and kids of color through financial education.

“It’s one thing to put a debit card into your teenager’s hands,” said Court. “That’s great. That teaches them how to spend money. It’s another thing to teach kids the core concepts about how to build wealth, or to know the difference between putting your money into an investment account, or putting your money into a CD versus a mutual fund versus a savings account. We teach what interest rates are, and what compound interest means. Our focus is on is financial education because it’s not enough to teach kids how to spend.”

Goalsetter raised $2.1 million in 2019 and now adds this latest round to that for a total of $6 million raised. This latest round was oversubscribed, giving Court the opportunity to be super selective about her investors.

“Every single one of these investors has a demonstrated commitment prior to people marching in the streets in April, to social justice and to investing in diversity and inclusion initiatives and people,” said Court. “Every single one of them. That was really important because we were oversubscribed and we had the luxury of being able to pick who our investors were. Every one of the investors that we invited to our table were investors who we knew invited folks who look like us in 2019 and 2018 and 2017 to their table.”

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